Mouselook is the first-person camera view in SL as seen from the eyes of the avatar. When in this mode the mouse is used to move the camera around, hence the name. Mouselook is often used for weapons, vehicles, and grabbing objects. The Mouselook view can be obtained by pressing "m" on the keyboard.
When using the llTakeControls function and the control event it is important to remember that the values returned by the same buttons can be different depending on if the avatar is in mouselook mode or not. For example, by default A will turn the avatar left in normal mode and trigger CONTROL_ROT_LEFT in the control event. However, in mouselook mode, A will cause the avatar to strafe left (move left without turning) and trigger CONTROL_LEFT.
If a "Mouselook" button is desired to appear at the bottom of the SL window, look at llTakeControls for instructions.
When "Show Avatar in Mouselook" is enabled, in preferences, the user's avatar is visible in mouselook mode, as well as any attachments (except those attached anywhere on the avatar's head).
Holding the "Alt" key in mouselook will show a hand-cursor to click on things while the camera isn't moving with the mouse.
A sitting agent can be forced into mouselook using llForceMouselook.