In 2006, Resident Gene Replacement managed to tweak the viewer in a way that allowed him to create these objects despite their limitations, until Linden Lab fixed the security hole some time later. The mega prims were distributed and spread quickly across the grid, since Residents found many ways to use them in their builds. While Linden Lab didn't ban the objects completely, their policy was to return them if they were a "nuisance." In a December 20th 2006 Town Hall discussion, Linden Lab announced that they were going to allow the use of mega prims on private estates. After open sourcing the viewer, another bug exploit allowed the creation of mega prims for a limited time. Residents took the chance to create a variety of these objects in many different sizes, even those which covered multiple regions completely. Linden Lab announced and discussed plans to prohibit the use of mega prims greater than 256m in one dimension, but then decided to only limit them to 64,000m (64km), since they found legitimate use for them (for example in horizons and skies).
Mega Prim Pros and Cons
Prim density and lag
Using a mega prim instead of multiple regular prims (for a wall, a floor, etc), dramatically decreases the number of faces which need to be drawn by the viewer, or, depending on how "smart" your graphic driver, the number of occlusions to calculate, thus avoiding drawing hidden faces. 
Draw distance and rendering
Depending on draw distance, very large mega prims are sometimes not rendered by the Viewer. Increasing draw distance, which renders the mega prim, also increases lag.
Land controls and parcel limits
Some problems with mega prims are obviously related to their huge size. They can reach far beyond parcel borders and disturb neighbors with their presence. Residents might not even recognize that it is a mega prim which is hindering them, since they might be inside the mega prim and therefore unable to see it.
Outdated Mega Prim Issues
Previously (prior to Havok 4) it was reported that the graphics engine wouldn't be able to work well with prims larger than 256 meter in any dimension.
Building with Mega Prims
With the exception of changing the dimensions of Mega prims, they can be edited like any other prim. The attempt to edit the dimension of a mega prim will result in all sides which are greater than 64m instantly resizing down to the maximum 64m limit. To be able to edit and move some huge mega prims, it is suggested to access the advanced menu (press - - - ) and to toggle "Limit Select Distance" off, as well as "Disable Camera Constraints" on.
In order to support builders who'd like to use mega prims, many Residents provide them free of charge. You can find many mega prim packages inworld or at SL webstores.
Future of Mega Prims
- Allow parcel owners/managers to move (or maybe just return) objects that overlap their parcels.
- Provide UI feedback to the Resident when moving their objects, indicating whether they overlap neighboring parcels.
- Maybe provide real-time enforcement of parcel permissions. That is, allow parcel owners to set a paranoid bit “I don’t want anyone, or these specific people, from putting stuff on my parcel”
He noted that "once that is done then perhaps we will allow you to make prims/objects as large as you want as long as they fit on your parcel."
- ^ Linden Lab allows use of mega prims on private estates (see at [14:55])
- ^ Linden Lab doesn't ban 256m mega prims.
- ^ Release Notes, Second Life Server 11.08.17.238770
- ^ Comment on VWR-1048: Raise sim prim limit of 15.000 to more.
- ^ The big prim problem - Bugs with mega prims
- ^ Read the 2008-04-09 and 2007-12-21 transcripts of Andrew Lindens Q&A sessions about the havok4 engine