First of all, augmented reality and virtual worlds are two different, distinguished and uncommon concepts. The two refer to two quite different yet emerging things, both with a quicker evolution and adoption then ever. The confusion grows when people try to relate concepts by using words, since, for instance, most Virtual Reality gadgets are gadgets made to help creating an augmented reality, and usually not related to virtual worlds, despite having "virtual" in the concept name.
Augmented reality is the term often used to describe how technology is used to enhance your perception and interaction with reality. While it is often used as a buzzword to sell you the latest ubiquous gadget ("with a mobile phone you're everywhere at any time!" or "listen your music everywere!") this concept of "augmenting reality" defines something that is happening since the rise of humanity: basicly we're constantly developing more ways of expanding our communication, expression and presence.
Virtual Worlds are "alternative realities" or "another worlds". They usually define other place (other planet, other universe, whatever) where other beings (humans, orcs, flying pigs, whatever) live.
The idea that augmented reality and virtual worlds can cross is usually wrong. The most common misconception is that a virtual world is a virtual place where people go to meet each other, which is basicly is a way of augmented reality. You can put in this type of augmented reality places technologies like IRC, where real people use virtual places (a #room in an irc.serv.er) to be able to chat with each other without distance constraints (you can talk at the same time with your nighbour, and your friend living in the other side of the world). But IRC just can't be seen or defined as a virtual world: there's no "virtual place where virtual beings exist).
In WOW or SL you can be a human or an orc or a flying pig, with a name chosen by yourself. Your avatar (the being in that virtual world) has to follow and live with the social and physic rules of that world. You and your avatar are different beings, different kinds of beings, living in different worlds. Your "one world" needs, relations or behaviour aren't your "other world" needs, relations or behaviour. Dying in one world doesn't mean dying in the other, if you eat doesn't mean that your avatar ate, and vice-versa. They are two different entities. If you have, or can have that in some system, you're probably on a virtual world, and not just some augmented reality technology.
The fact that you don't have the imposition to role play in a virtual world, it doesn't mean it is not a virtual world but just an augmented reality. Furthermore, virtual worlds can be thypicaly used as a mean of augmented reality. As an example, in Second Life you'll see avatars that are (or try to be) exactly like the humans behing those avatars are, but you'll also see RL executives with female avatars that do sex for money, or RL lawyers whose avatars are of mythical beasts.
If you use a Virtual World as a way to achieve an augmented reality, or even if most people use some virtual world as a way to achieve an augmented reality, it doesn't mean that the described technology isn't a virtual world but just a way to achieve an augmented reality, it only means that in that Virtual World all avatars are being used as a way to achieve an augmented reality, nothing else.