Bitcoin is just a virtual currency, but it is used as real money to buy many things. There are many people who accept Bitcoin payments for items, including online stores and regular stores. Popular online stores accept Bitcoins including Newegg, Overstock, Microsoft, Dell and more.
In the United States, there are Reeds Jewelers, One Shot Hotels, Holiday Inn, and even pizza locations, restaurants and more. You can even use Bitcoin to buy addictive drugs, gambling, bullion, or even donate to charity. This is the reason why I like BTC.
As far as I know, bitcoin is now being used as a form of payment by some stores, but only a small number of stores. We can't buy every kind of thing. So I think we still need to convert bitcoin into fiat money to buy things.