My former philosophy thesis advisor from Yale is on Bloggingheads.tv! She is interested on the interaction between the imagination and normal cognition, and she begins by describing her newly coined concept of “Alief” (Pron: uh-LEAF). Basically, an alief describes something that is similar to a belief insofar as it guides our behavior, but different from belief insofar as we know that it is really a product of our imagination.
For instance, we might refuse to eat a piece of fudge shaped like feces even though we know that it tastes like any other piece of chocolate. Here, we allow something that we don’t honestly believe (namely, that the brown object is disgusting) to guide our behavior. Aliefs are interesting to cognitive scientists because they have important implications for how we act in the world. Bloom and Gendler discuss these implications in the context of evolutionary psychology, racial prejudice, video games, etc.
Brain In A Vat 
Interesting article – it reminded me of a book I read that referenced multiple studies showing that the brain doesn’t differentiate between what is imaged/imagined or actually experienced – neurons fire and with repitition – even through imagination can hard wire neuro pathways and networks in the brain. People who imagine practicing the piano were studied against a group that actually practiced physically and the results were statistically significant in the similarity of outcomes. Those that did both were further advanced than both groups.