I toyed around with it a bit - it's an interesting concept, but I lost interest real fast. I made a blind skinny malformed 8 foot tall african witch doctor with ti-dye skin, a huge poofy skirt made of American flags, and furry-masks for feet and hands and a tail growing out of his forehead. :o
The dogglounge website that I am affiliated with has a dance club setup in second life. When I DJ, I can log my second life toon in and set up at the DJ booth and people that visit the club can stream the live DJ mix. There is even a script that animates the toon and makes them look like they are DJing. There's a dancefloor, several scripted dances, lights etc. It takes the whole chat window aspect of the website to another level. That being said, I haven't spent a whole lot of time logged in other than to check out the Dogglounge.