I've always been suspicious of the value brands can get from Second Life, but this takes the cake. Apparently digital nirvana includes pedophiles and distributing naked pics of little boys and girls. That's just wonderful. I'm sure the brands that've set up shop are thrilled to be associated with this - even worse if this crap is taking place on their islands/properties. Forget about CGM worries and "letting go", this is far, far worse.
But it's ok, because I'm sure all of the brands in SL have been told by their agencies that there'd be little return and, given the nature of virtual worlds, people can lie about their age, sex, income and intent. Right? Oh, snap.
Update: Damn, Robert. Next time I'll just link to you... That's what a week's worth of working on a pitch will do to ya'. ;)