This paper provides a critical analysis of virtual environments made in recent leisure and cultural studies discussions, which claim virtual reality to be the technotopia of post-modern society. Such positions describe virtual realities as worlds of infinite freedom, which transcend human subjectivity and where identity becomes no longer burdened by the prejudices of persons. Arguing that cyberspace offers little more than a token gesture towards such liberation, the paper suggests a shift in focus from the power relations that might change or remain because of virtual environments, to an awareness of their implications for human beings. Such technologies as chat rooms, the Internet, and cyber-sex, are used to illustrate the fundamental challenge of virtual leisure to the human condition. This human condition is often presumed to represent 'reality/actuality' and, as such, is said to be in contrast to virtual environments. However, this paper extends its critique of virtual reality, by questioning such a distinction and arguing that new cyber-virtual reality is no more or no less than a sophistication of virtualness that has always reflected the human, embodied experience. Consequently, it is argued how cyberspace is more profound for its challenge to identity construction than for its emancipatory function.