The real world seems to be connected to Cyberspace in that processes on real-world computers represent events in Cyberspace, or vice-versa. Portals are the only known way to travel between the two universes: in "Watts of Halloween Trouble", it is heavily implied that the Earth children would be stuck in Cyberspace if the portal system couldn't be fixed.
Inhabitants of the real world don't seem to know that Cyberspace exists. Though described as a computer whiz, Inez never imagined she could physically go into the Internet until the events of "Lost My Marbles". In contrast, Hacker does know of the real world, and has observed it directly using what seems to be a library security camera feed. The CyberSquad has contemplated the destruction that Hacker could cause if he somehow reached the real world.