Right now, almost everything you see in Second Life has been built in-world with the Second Life client’s own tools. There’s been some speculation about what will happen when/if conversion tools start appearing that can bring existing libraries of 3D objects into Second Life — not just toasters and cars, but entire buildings — have a look at what’s available in Google’s own 3D Warehouse, aimed at Sketchup and Google Earth.
Personally, I think such a tool would result in a big bang for Second Life, and radically change what is cheap and expensive in-world, because the creativity and time that is in scarce supply could then focus on constructing more Second-Life specific experiences — which involves mainly scripting. In other words, the supply of static virtual buildings will go up and their production will be commodified, but scripting will become more popular and in demand as all these new imported objects now have to be given something to do.
I think many people are pining after such a conversion tool. An entry on IBM’s Second Life developer blog Eightbar from September 2006 on efforts to create one still sends traffic everyday to this post on Ogle Earth (about converting SketchUp files to Blender, an open source 3D authoring tool).
Finally, Google Earth CTO Michael Jones recently commented here that creating such a tool for SketchUp should be feasible via a script using SketchUp’s built-in support for Ruby. All we need then is for somebody to actually do it:-)