Though no one wants to admit it, there is a corrolation for video games as well. In both cases we know it's a simulation, yet our bodies respond as if it were real.
We know that the person is simulated, but we can suspend that knowledge, just like we suspend reality in pretend play. Our experiences and actions in the simulation are a pretend play of how we would respond in a similar, real situation (otherwise what is the point of the simulation, right?). So we would generally not feel cool about torturing a virtual person just as we'd feel not OK about torturing someone in real life. The more realistic the simulation, the stronger this feeling. In order for us to be able to deliberately act out in a simulation behaviours we do not exhibit in real life, we have to know it is not real, and that can only happen if the simulation is not totally realistic. There has to be a balance: realistic enough to suck you in, but fake enough to let you disengage from it a bit. CS:Source for instance would be a lot less fun if you actually saw people writhing in blood, fear and agony while trying to put their insides back with severed arms. Some things are not meant to be that realistic. In virtual person simulation you get a similar phenomenon called the "uncanny valley". If an avatar looks unrealistic, you can treat it like a cartoon. If it looks 100% real, you will relate to it as 100% real. But if it is somewhere inbetween, it gives you the creeps because you know it is a simulation, but it also looks too real... and that's just freaky, like seeing a corpse.
Do you see games moving towards that valley? FEAR being an obvious example. WIth the trend towards hyper-realism in games I have to wonder if at some point they will become "too realistic" or if the transitin will be so gradual that we adapt and so never reavch that threshold. I know for myself playing the HL2 demo almost put me off ever playing the game (they just HAD to pick Ravenholm, right? ) However when I did finally get my copy by the time I got there I was inured to the level of realism and it wasn't so bad. Still, daylight never looked so good. I also think that for a lot of people there is a desire to graphically kill and torture and that if they could live those fantasies out in games the games would be very popular, especially in an online envroment. Maybe I'm wrong on this one, but it would surprise me if I were.
Not as many people as you'd think. Most people just want to live more exciting, meaningful lives, and be somebody. In Asia many people get sucked into Ultima etc. for that reason. If people had fantasies of torture and murder you would see it expressed there, if anywhere. But it seems that we don't.