Check out the cheerily-titled entry "Keeping Second Life Safe, Together" from the Linden blog. Here's the text in its entirety:
Just what is "broadly offensive"? And to whom? Potentially illegal where--in any country that has access to Second Life? That swift and brutal sanction is begging for abuse.
The diversity of things to see and do within Second Life is almost unimaginable, but our community has made it clear to us that certain types of content and activity are simply not acceptable in any form. Real-life images, avatar portrayals, and other depiction of sexual or lewd acts involving or appearing to involve children or minors; real-life images, avatar portrayals, and other depictions of sexual violence including rape, real-life images, avatar portrayals, and other depictions of extreme or graphic violence, and other broadly offensive content are never allowed or tolerated within Second Life.
Please help us to keep Second Life a safe and welcoming space by continuing to notify Linden Lab about locations in-world that are violating our Community Standards regarding broadly offensive and potentially illegal content. Our team monitors such notification 24-hours a day, seven-days a week. Individuals and groups promoting or providing such content and activities will be swiftly met with a variety of sanctions, including termination of accounts, closure of groups, removal of content, and loss of land. It’s up to all of us to make sure Second Life remains a safe and welcoming haven of creativity and social vision.
I hope I won't be having to keep burqas in my inventory.