From: Jig Chippewa
Do you mean our chats are kept??? Why would anyone want to do that? And how do I erase them?
To my knowledge, LL records all of your actions: where you go, what you touch, things you buy (of course), and so on in great detail. All your Chat and IMs are recorded there as well. They have some formal policy regarding data retention that said something like it gets erased every 3 months. However, I was told at one point (several years into SL) that "to date, we haven't ever actually deleted anything".
I assume that they retain it for debugging, data mining, and law enforcement purposes. LL probably has a fireable-offense rule against accessing the information for random snooping, but who knows how well that's enforced, what real controls and access auditing is on it -- my guess would be approximately none. But I certainly have no inside knowledge of this. And although I've never heard it from an LL employee, I think it's safe to say that all the information is delivered (one way or another, with or without LL's cooperation) to the Department of Homeland Security, which has identified Second Life as a communication system that is likely used by terrorists.
I have not heard that communications are available to random hackers, and I've never studied the source code to SL, myself. IMs are not supposed to be interceptable. Hearing public Chat without your avatar being within range might or might not be possible through tricks. (Of course, someone can always trivially bug you using an object. And you can also have such an object follow someone around anywhere on the grid, I think.)
As for Voice, I heard a while back (on these forums, I believe) that someone had cracked that, because all you had to do was connect to the voice servers (at ViVox, I guess) and there was no security. Just figure out or guess or scan for the Voice channel that you want to hear, and it will hand it over to you.
What happens to your "private" data in the future? What if LL is cracked in to? What if it's an inside job, or some employee just walks off with this on a removable media device? What if the company is sold to someone? Who knows.
However, Linden Lab is sometimes seen as trying to position themselves as the trusted broker of information and identity credentials for everyone on the Internet -- all virtual worlds connected through them. THE social networking hub. Given their internal problems, the fact that they've been cracked into several times over the years, and the Aristotle debacle, their lack of transparency and the general feeling of mistrust they have engendered from their customers, and that it's all over the web in historical form...staking their business plan on their stellar reputation for security and customer trust seems like a ludicrous notion, to me.
On the other hand, my chat logs and IMs have not been disclosed, as far as I can tell. (Of course, I can't really tell!)
The short answer is: Expect no privacy in SL. Assume every little thing you do and say will eventually be revealed.
Similar things can be said for Facebook. Of course, I have heard that SL has more customers than Facebook. And SL has more IP Telephony than Vonage or Skype, too!
I wonder what SL 2.0 will be?
Coming in a few months!
PS. I log all my Chat/IMs on my computer. I hate it when it crashes and loses them!
I refer back to it for useful things people told me, and for remembering who people are that I haven't talked to in a long time, things like that.