I strongly oppose drusepth's answer. Slang is spoken language. Internet slang is written language. You cannot speak it.
Think about how you would speak to a friend. You are unable to say
n00b out loud. You will say "owned", "leet" and "noob". So, when you write a representation of spoken language such as dialogue you must use what the person would actually say.
You can use internet slang in internal monologue and stream of consciousness, because, after all, you can think the literal representation of a word. So if your narrator is a /b/tard, he1 would certainly use internet slang and not Standard English in his narration, i.e. outside the dialogue.
1 There are no girls on the internet.
Of course, letters are not sounds, and we do not actually say "noob", but (in IPA) /nuːb/. But since the overwhelming majority of readers do not differentiate between phonemes and graphemes but take the letters for the sounds and even "hear" the words as they read, letters are being used as the common representation of spoken language. Such a habitual and unconscious equation of letters and sounds does not yet exist for internet slang, at least not for the general public.
But if you write for a nerd audience and publish in a nerd publication such as Wired, or if your text is heavily ironic, you could use internet slang in dialogue.
If you write for a non-nerd audience, do not forget to explain the slang you use in a note before, or footnote at, the beginning of the text. Just as not everyone in the world can read Lowland Scots, most people would understand "pwned" as a typo and not buy a book that is consistently misspelled.