I just posted an advice guideline for machinimators who want to protect their work from copyright infringement notices and other legal worries, based on conversations gleaned at a recent Stanford Law conference on the topic. Much of it applies more directly to machinima made in games like World of Warcraft or Halo, but a few points are just as applicable to Second Life machinima: specifically, "Don’t Assume 'Fair Use' Will Protect You", "Unauthorized Music Is a Huge Red Flag", and "Don’t Panic". To that advice, SL machinimators must also consider EFF lawyer Fred Von Lohmann's observation: Second Life copyright issues are "In some ways worse" than real life. Since every Resident retains IP rights to their creations, you probably want written permission from the creators and owners of every avatar, build, and location prominently featured in your machinima. Or you can consider creating an SL "backlot" where you and your collaborators own the IP to all those aspects. (I believe ILL Clan Studios and other professional machinimators to do this.) Anyway, read it all here.