Don't get me wrong, I think it is useful to be able to be someone else online. I used to update my photography website and for several years that was a big part of my online persona. Most of the people who I talked to everyday couldn't care less about the pictures I had just taken or my new interest in a particular camera, but there was a small audience of folks who enjoyed my posts and images. In recent years, that hobby has taken a back seat to parenthood, job, and a doctoral program. I've posted much more online about my doctoral work than photography - again a topic most people don't want to hear me talk about everyday. The Internet helps us find an appreciative audience that we can't always find in real life.
But there has to be a limit to how far we will alter our ego online. Sure, in an online role-playing game we can be whoever we want, but in social networking, I think we need to behave with a sense of morality like the one we live with in our face to face relationships.
There was a series of Ad Council PSAs that came out several years ago that asked, "If you wouldn't say it in person, why say it online?" I think this a critical point to reflect upon for adolescents. Most of them can reflect meaningfully and make wise choices if given the opportunity, but many never give it any thought, and embrace hurtful online behaviors. They hurt themselves and others and it is amazing how often, when it is brought to their attention, they say, "But that's not really who I am!"
Kids need guidance in navigating the balancing act of real life and online personas. Common Sense Media has great resources for getting kids to reflect on Internet safety.