Second Life 2.0
Second Life 2.0 is a conceptual future version of the current virtual environment, one which will have had a number of architectural changes and improvements to improve performance, scalability, and usability. Currently it is only an ideal and not an actual service.
SL 1.0 Implementation Issues
Second Life version 1.x has a number of design and implementation errors that cannot now be corrected. The current software has become a legacy system similar to an old mainframe harboring the year-2000 bug.
For something as complex as an open-access full 3D virtual environment, there are many different systems and specifications that need very careful planning and design. In many cases it is not known what the effect will be of a design decision made early in the development process.
A small overlooked problem in the beginning can become uncorrectable over time. Users of the system start to notice the problem and find ways to adapt and compensate for the problem. With these adaptations in place, the original problem now cannot be "fixed" because that will break everything that was built to internally compensate for the problem.
At some point in the future a decision will have to be made regarding SL 2.0. Will it continue to provide legacy support for these known design flaws, or will it start over fresh with all problems corrected, and therefore incompatible with nearly everything currently built in Second Life 1.x?
List of known SL 1.0 design flaws
Avatar is bigger than a normal human
The standard avatar height does not match the size of average humans, in the measurement units used by the virtual world. The default avatar height is about 25% larger than a normal human. This may seems a small problem, but it affects the design of everything else in the virtual space.
Because all in-world objects have been built slightly larger than normal to compensate for the oversize avatar, this means the in-world measurement system cannot be used to accurately duplicate real-life objects; the resulting object is too small compared to the typical avatar. A house built using actual real-world measurements would be too slightly small compared to the avatar.
Due to this minor early design flaw of the avatar, the inworld definition of "meters" is meaningless. It would be better to stop calling them meters and use another SL-specific term (such as the "munge"), so that people don't confuse it with correct real-world measurements.
Visual object size doesn't match physical size
When two physical objects are stacked in Second Life 1.x, they do not stack edge-to-edge as in the real world. Instead there is a wide empty gap between them of about 0.100 munges. This is a result of the physical size of an object (its "collision volume") being larger than its actual visual appearance.
The avatar is also a physical object and consequently does not actually stand on the ground but stands about 0.100 munges above it. A number of hacks have been implemented in the client so that the avatar's feet will seem to be firmly on the ground even if they really are not.