http://news.sky.com/skynews/article/0,,30100-1290719,00.html
Very interesting ramifications for web 2.0
There have been several high-profile cases in which users in Second Life were found to have been creating or exchanging child pornography. This includes both real-life photographs and virtual recreations of pornographic scenes involving children, which are illegal in certain countries (including Germany) due to the corrupting effect of the material, even if no actual child was involved.
Although this problem could occur on any internet site which allowed material to be freely uploaded, it is notable on Second Life because of its substantial size, centralized hosting model, opportunities for private transactions, and strong support for content crossover. Second Life is quite deliberately designed to ensure that content, especially avatar-related content, can be mixed and matched: almost any content can be combined with any other, and restrictions cannot be easily imposed on this, not even by the content creators. Thus there is no way to prevent a paedophile purchasing a child avatar and having it run a sexual animation, other than removing child avatars and/or sexual animations from the world entirely and denying them to players who wish to play sexual activity with adult avatars, or who wish to innocently role-play children or child-like characters. The problem is compounded by the full customizability of Second Life avatars; it is easy to create an avatar which has the height and stature of an adult but appears child-like with regard to body development, or vice versa, and a person's belief regarding the age their avatar appears to be may not match other people's.
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