I have created fake identities online before, for various mundane purposes. Now I have one I use as my "spam account," i.e. I want to sign up for a company's website but I don't want to give them my real name, phone number, address, birth date, etc. Sometimes the level of information they require to create an account is absurd. So I will give them my other email address with a fake name/birth date.
Back when I was a teenager, I created alternate identities more for privacy, to hide my super-top-secret feelings about how dramatically awful life was. I would have various online diaries/journals shared only with specific people, with different identities attached to them. I would have felt like the world was ending if I knew a family member was reading my inner-most thoughts on LiveJournal (but it was okay for the rest of the internet to read them). So basically, I've also used alternate identities as a way to express emotions that I felt I couldn't express in my real life.
My inner-most thoughts aren't nearly that interesting anymore, so I haven't felt a need to create an alternate me in quite some time.