This paper examines the effective deployment of conversational agents in virtual worlds from the perspective of researchers/practitioners in cognitive psychology, computing science, learning technologies and engineering. From a cognitive perspective, the major challenge lies in the coordination and management of the various channels of information associated with conversation/communication and integrating this information with the virtual space of the environment and the belief space of the user. From computing science, the requirements include conversational competency, use of nonverbal cues, animation consistent with affective states, believability, domain competency and user adaptability. From a learning technologies perspective, the challenge is to maximise the considerable affordances provided by conversational avatars in virtual worlds balanced against ecologically valid investigations regarding utility. Finally, the engineering perspective focuses on the technical competency required to implement effective and functional agents, and the associated costs to enable student access. Taken together, the four perspectives draw attention to the quality of the agent-user interaction, how theory, practice and research are closely intertwined, and the multidisciplinary nature of this area with opportunities for cross fertilisation and collaboration.