Increasingly people inhabit both real physical and online virtual spaces. In this work we are investigating how combinations of real and virtual spaces can be used to enhance everyday life. For example we are looking at creating new forms of learning, entertainment and R&D environments. For learning we have created an interactive teaching environment based on the Open Wonderland toolset. For entertainment we researching into the use of AI to develop non-human avatars that display more realistic natural and engaging behavior. For R&D we are building interactive mixed reality environments based on Electronic Arts Sims games and RealExtend (an open version of SecondLife) that function as simulators for intelligent environments research and allow environments such as digital homes to be demonstrated and evaluated by the wider connected population.