Content Creation

One of the most unusual features of the Second Life Virtual World is that any user can create new stuff that every one else can see and use. The ambitious can create things for sale. The artistic can create art. Monopoly players can buy and sell land using real money and hotels that avatars live in. All of these things together, and more, are called Content Creation.
One reason that people are willing to put their creations into Second Life is that SL tries hard to protect Intellectual Property Rights (or IP, for short). just like in the real world, there are ways to steal other people's creations, but in SL this is for the most part not a common, recurring problem, thanks to the close attention given to it by the SL technology.
So, what does it mean to "Create Content"? This article is a high level overview. The Creation Portal takes you more in depth. It describes the broad categories of things that users of SL create, and what kinds of tools they use to create them. Enjoy. Remember, this is your Wiki. Feel free to edit it to your satisfaction.
A lot of people divide creation up by the tool used, such as scripting, textures, building, animation, and so on. Another way to look at it is that many different techniques are needed to create thing. For example, one can build a house using the object editor, but one might also need to create a door texture for it in GIMP, and write a script to make the door open and close.
It is all one. There are two kinds of people in the world, the ones who think there are two kinds of people, and the ones who don't.
==Homesteading==
Lots of SL Residents buy a piece of virtual land, and start building a dream home, or at least a dingy flat. Maybe a fishing camp, or a ski lodge, or a beach house, or a mountain top castle with a dungeon. As the tag line says, it is your imagination.
There are lots of different approaches. Some people start out with the bulldozer tool in the Land Editor, and grade their land the way they want it. Then they buy a prefabricated house at a place like [SLExchange.com], [OnRez.com], or one of the many in-world architect firms. With more money, one might have a house and landscaping designed and built by a custom builder.
Is this sounding like the real world?
It is also common to garden, either buying or making Flora and Fauna.
The in-world building tools can be used to make many of these things from scratch. Yes, it takes time and practice, but for some people it is very fulfilling to see blocks of raw materials slowly assembled into a luxury retreat.
The default building material at first looks like plywood. If you want a marble wall instead of a plywood wall, then what? The answer is to apply a texture. This is an image of what the surface should look like, applied over the plywood. Every Resident has a library of textures, and there are lots more available for free and for purchase. Textures are also a good example of building tools outside SL. To make a unique texture, use a tool such as Adobe Photoshop or the GIMP to create an image that you later upload to be used in SL. Nice image? Sell it!
One last thing about homesteading. Sometimes buildings, landscape, or flora and fauna do something. Doors open and close. Fireflies flicker. People sit in hot tubs and make out. What these all have in common is that the actions are usually controlled by a script, which is a set of instructions in a language called Linden Scripting Langage, or LSL. Like everything else in SL, there are lots of scripts already available for free and for purchase, and if you like that kind of thing, you can do it yourself.
==Fashion==
It seems like many people really love to shop in SL. Perhaps it is because things they cannot afford in real life are so inexpensive in SL.
People like cool hair, jewelry, clothes, shoes,and just about anything you can think of, and some you will wish you hadn't. Somebody has to make all that stuff, and that someone is just a regular SL Resident like you. 
There is even a Cosmopolitan-like [SL Fashion magazine].
Making all these things in SL varies from easy to difficult. Simple hair and clothes can be made with the Appearance Editor. Nicer things require more work.
===Clothing===
Nice clothing is usually a combination of objects made with the Object Editor, and material made with an external 2D graphics program such as Photoshop or the GIMP. Artistic skill and determination required.
===Hair===
Hair is usually made using the Object Editor. It is built up lock by lock. It is colored using images created using 2D graphics.
===Jewelry===
Like hair, usually made in the Object Editor and then colored with images.
===Shoes===
Or, to be more honest, really tacky high heels, but people love them. Shoes are usually constructed from objects like jewelry, with textures plastered on. One tricky about shoes is the use of Invisiprims, invisible objects that also make the things inside of them invisible. These can be made to produce to the illusion of high heels or a pirate's peg-leg.
===Body Shape and Skin===
Surprise. In the real world, you are born with your body and skin, and stuck with it. In SL it is something you can make or buy. Think of skin as a sort of tight fitting piece of art with all the interesting bits painted on. Shape is made using the Appearance Editor.
==Commerce==
Have you always wanted to run the coolest club in town? Apparently, you are not alone, since SL has cool clubs everywhere, with every possible imaginable theme.
*Buy or rent some land.
*Build a club, or hire someone to build it.
*Advertise.
*Hire a staff of DJs, musicians, sex workers, or whatever you think a cool club needs.
How about a clothing store? Or a travel agency, or a marina or a golf course or a ski lodge. Coffee house? Chess club?
Buy it, build it, and run it.
==Devices==
Building a house in SL is not that different from building a sail boat. They are both made of objects using the Object Editor.
However, consider the difference between a door, an wall, and a sail boat. A wall doesn't usually do much. Once it is built, and has some wall paper, it pretty much just sits there. A door, on the other hand, has a behavior. It opens and closes. A fancy door might only open when the house owner approaches, or when someone utters the secret password ("friend", in case you ever need it).
To make a door do this kind of thing, it needs a script, a precise set of instructions written in LSL, the Linden Scripting Language. The script goes inside the door object. another approach is to put one script in the door object, and another one in a doorbell object. The doorbell script talks to the door script, to tell it when to open and close.
Now consider a sail boat. The script in a sail boat is much more complex than the one in a door. It puts the sails up and down, it makes the boat heel over if the wind blows harder, it determines how fast the boat should go depending on the wind speed and direction. A simple sail boat script will do this in a half-assed sort of way, and a really good sail boat script will do this in a sophisticated and high priced sort of way.
Some people have created very elaborate devices that do all sorts of useful things. The furniture that contains dozens of animations that take over your avatar when you sit on them are a good example.
People also make things like pogo sticks, umbrellas, parachutes, parrots, animation over-riders, espionage devices, links to external web pages, fireworks, helicopters, flying carpets, torture devices, pleasure devices, pleasure devices for people who like to be tortured, pets that follow you around, ...
Get it? Visit the LSL Portal for more details.
==Activities==
When you go to a dance club in SL, you are in fact creating content. One way to look at SL is that it is a multi-author improvisational real-time work of fiction (unless you think we all really look like that?!?).
Host a party? Content. Explore a sim with a friend? Content. Everything that everything does is part of the content that makes up SL (except for all the bitching on the blogs).
==Development==
It might not look like content, but a good planner and organizer can make things happen. Things like events, for example. There are charity events inside SL, like the Relay for Life, that mirror real world events. The people who organize it are creating content.
The Public Radio show [Science Friday] simulcasts in SL. Again, the planning and organizing of such a happening is a kind of content creation. 
==Tool Building==
As if creating content in SL is not enough, some people spend most of their time building tools that other people can use to create content. Some of these tools work inside SL, and others are off-line external tools.