Like Kristen and Roxie, I too was drawn in by the eerie reverberation of the title Who's Afraid of Virginia Woolf, a film adaptation of a play (which I have not seen) by the same name. Most practically, this is because the characters' repetition of the ghost-possessed-child phrase is the only direct allusion to Woolf in the entire film. As Roxie writes, Nichols focuses more on the philosophical dilemmas with which Woolf challenges us, rather than on references and parallels to specific texts. Nonetheless, the professorial professor George, and his equally cynical and sardonic wife Martha, make for a bizarre version of Clarissa and Richard Dalloway. This violently dysfunctional modern couple presages the postmodern couple of Sam Mendes' American Beauty, in which Kevin Spacey reminds us that some of us are too worn down to even bother with the traditional facade anymore. Indeed, the whole film seems to bring the existential crises that Woolf tackles to the surface, as Nichols infuses the scenes with dark lighting, and the soundtrack with plaintive classical guitar.
George conceals his fears of impotence and castration by confronting others with intellectual mind games. He attempts to assert his superiority with his brain, because he cannot do so with his bank account, or presumably with his sexual prowess, as his wife constantly cuckolds him. As with the absentminded Richard strolling in the park, constructing grumpy neighbor laws against horseplay in his head, George lives so much of his life in his head that it is impossible to believe he has a heart. He even goes as far as to rehearse the precise tone, inflection, and body language with which he will hurt his wife by telling her that their son has died. Similarly, Martha expresses her disappointment with George's relatively small salary so ferociously that one can hear in her tone of voice the yearning of Clarissa Dalloway to be at the top and center of her social circle.
I would like to emphasize one aspect of the film a bit more strongly than my classmates--the role of alcohol. If our actors did not actually imbibe some "Bergen" of their own as part of some pleasantly sacrificial method acting routine, they certainly deserve the Oscars for which the entire credited cast was apparently nominated (http://www.imdb.com/title/tt0061184/trivia). Liquor serves as the perfect metaphor for the permeation of reality into fiction, and fiction into reality. Our characters spend nearly the entire film in a drunken haze, as the saying has it, to forget their troubles, but instead end up revealing their deepest insecurities, and confronting each other with the harshest truths imaginable. In our attempts to escape reality, we only drive ourselves further into insanity, into illusions, which our nature prevents us from maintaining for very long. The characters make the inevitable re-entry into reality that much more striking and terrible for themselves. We are reminded of Raymond Carver's injunction against drinking and thinking.
As with the children's song of which the film's title is a mini satire, the answer to the question ends up being "We all are." Even as children, we develop Freudian defense mechanisms such as sarcasm to counter the feelings, people, and experiences we find unpleasant. While we are unlikely to encounter any literal claws and fangs in our urban setting, Woolf's modernist dilemma knocks patiently on our door.