Disclaimer: I am no psychologist. This post is based purely on my own observations and experiences with online gaming, in particular World of Warcraft.
Games like World of Warcraft can provide many positive experiences for players. Along side the obvious social aspects of these kinds of games, gaming can provide a sense of accomplishment. When your guild finally downs that big boss, you complete a quest that had been giving you problems or you finally reach the highest level in the game it feels good. So when does this become a problem?
If the sense of accomplishment and achievement you are receiving from a game starts to outstrip any other sense of accomplishment, then it might be time to review your gaming habits. Is gaming your only source of socialization or do you pass up other invitations just to play? Has raiding become more important than sex or are you neglecting your job or other important relationships? Maybe it's time to take a few steps back and see what you can change.
From a personal standpoint, I know there have been times when I have played 'too much'. How much is too much will vary from person to person but, for me, it was 'too much' when I started looking more forward to logging in to World of Warcraft or Eve Online than going out and doing things with my husband or my friends. There were times, I am ashamed to admit, I turned down or even cancelled invitations so I could play. Fortunately, I recognized the problem and addressed the issues. I still play World of Warcraft (after a few extended breaks) but not the detriment of my day to day life.
I've seen MMOs destroy relationships. I've known people who have lost their jobs because they were more focused on gaming than on what they should be doing. While psychologists still seem to be debating on whether or not video game addiction should be included as a disorder (linked to an outside article), I think most of us can recognize signs of addiction. It's what we do with that information that matters. Don't forget there's a big, wide world out there too.