Except as prohibited by law, you hereby waive, and you agree to waive, any moral rights (including attribution and integrity) that you may have in any User Content, even if it is altered or changed in a manner not agreeable to you. To the extent not waivable, you irrevocably agree not to exercise such rights (if any) in a manner that interferes with any exercise of the granted rights. You understand that you will not receive any fees, sums, consideration or remuneration for any of the rights granted in this Section.
Except as otherwise described in any Additional Terms (such as a contest’s official rules) which will govern the submission of your User Content, you hereby grant to Linden Lab, and you agree to grant to Linden Lab, the non-exclusive, unrestricted, unconditional, unlimited, worldwide, irrevocable, perpetual, and cost-free right and license to use, copy, record, distribute, reproduce, disclose, sell, re-sell, sublicense (through multiple levels), modify, display, publicly perform, transmit, publish, broadcast, translate, make derivative works of, and otherwise exploit in any manner whatsoever, all or any portion of your User Content (and derivative works thereof), for any purpose whatsoever in all formats, on or through any media, software, formula, or medium now known or hereafter developed, and with any technology or devices now known or hereafter developed, and to advertise, market, and promote the same. You agree that the license includes the right to copy, analyze and use any of your Content as Linden Lab may deem necessary or desirable for purposes of debugging, testing, or providing support or development services in connection with the Service and future improvements to the Service. The license granted in this Section 2.3 is referred to as the "Service Content License."
In other words, Linden Lab is forcing content creators to agree that any and all content they create is automatically licensed to them, without restriction. This means they have the right to use, sell, and modify your content as they see fit.
What is even more disturbing is they are forcing content creators to agree to a retroactive ToS, which is technically not legal. In every other case beside this one, a change to Terms of Service applies to any and all products you buy AFTER it goes into effect and does NOT govern content you purchased before the change.
I spent time "listening" to the talk in the group United Content Creators today, and was appalled at what I was hearing. The basic conclusion most came to is that they are not moving their content elsewhere, because the market they seek is on Second Life. They would like to see the ToS changed, and in some ways, expect that it will be. What they are not stopping to think of is if they move their content to another grid - Inworldz is a good example of a grid that has full respect for content - then people would follow them. They're more worried (and are harnessed to) the Almighty Dollar.
This argument has come up before but in the past things weren't quite as dire as they are, now. The way the ToS is worded, our creations are not our own. Linden Lab will use our content as they see fit and they will NOT reimburse us for doing so. Their ToS makes Facebook's recent changes look like child's play.
I am seriously considering not creating any further items for my store here, and moving back to Inworldz.
There are a few people I know, including one of my exes, that have created content here as a "tribute" to something which is fully licensed. According to the new ToS, what they have created now belongs to Linden Lab. If you think about it, this causes all KINDS of legal headaches, since the content that is being "tributed" already belongs to somebody else. It will be interesting to see what happens to content like that. The creators made it not to make any money off it but for others to enjoy it. With the new ToS the content becomes something else entirely.
I already know if several sites who used to allow their content to be uploaded to SL for use in a person's build (not to be sold as-is). They have amended their own ToS to disallow this upload any longer. One of my favorite sites, cgtextures.com, is a good example.
In other words, the ramifications of the change in the SL ToS go farther than the Second Life service itself.
If you are interested in hearing the meeting, an audio recording is available, here:
UPDATE: The meeting was videotaped and can be seen here: http://www.youtube.com/watch?v=jifM2n4ttSE