I have only been playing for few days, but I just had to make the "anatomically correct" skin you speak of after seeing one in the Second Life Herald. It sounds like you have more experience than me, but I figured I'd describe my process. I thought a few more hints might help you or others, and I was also wondering if I could have done it a better or more efficient way. Working in the Gimp I did the following. I may have missed a few blurs, and filters and such, but these are things I found I needed to attend to. If any one has comments or suggestions, I'd love to hear them. Turned out to be a lot of fun.
1) I wanted to make my first avatar look a lot like me so I went on the web and chose a model with nude photos that looked something like me, especially in coloration (do this in private, there will be nudity). I found it particularly useful to find a model with pics from many angles. You could also have a friend photograph you (or a willing model if you don't want to be you) in good diffuse lighting in a lot of unflattering angles (I did not do this).
2) For the base skin tone, pick a neutral area on the model image and fill an entire layer with this. You'll want a transparent background though. Color selection seems to be very important and I basically created a palette of colors from my model to work from.
3) Preferably on the same model and the same pic, cut the body parts you want and past them onto new layers of your work. Use a lot of feathering. Different models and to a lesser extent, different pics of the same model will yield different skin tones and won't look right. Pics from the same photo shoot seem to work well.
4) Using templates and contour guides (Thanks Chip!) move your body parts around until you like it. I used DAZ studio to preview a lot.
5) Use your feather selection tools and blends to get it all to look seamless. I also found playing with ALPHA especially on the nipples paid off.
a) Watch out for white halos around your nipples
b) Trim the nether regions to the sides as much as possible. Otherwise the color
tends to bleed down the legs.
Preview. Touch up. Preview. Touch up...
6) I didn't like the pure photographed look so much, and though smudging went a long way towards making it look better on the model. Preview. Touch up. Preview. Touch up. Crap! Undo. Undo. Undo. Touch up. Preview...
7) On a new layer add any marks and moles tats and what not. Freckles too, I didn't like the freckles supplied in SL. Preview. Touch up. Preview. Touch up...

If you want a sun tan, use Chips contour guide and think about where the sun shines and don't shine. Using my base skin tone as a base, I chose darker and lighter colors to do this. The dodge tool didn't look right. One trick I got here was to use the color select tool and choose on Chip's contour guide to pick areas that face the same direction. These areas will likely see the same sun. Play with the selectivity and the feathering until you get your selection just right. Be careful though, Top and bottom are the same color, so you'll have some erasing to do. You also may have grid lines to deal with. Then, go over and smudge and air brush to touch up. Preview. Touch up. Preview. Touch up...
9) I set the opaqueness of my base layer down to about 40%. This was a pretty good trade off between getting the color I was looking for and still seeing the SL skin. It looked pretty good with 100% too though.
10) I am not that hirsute, but I wanted a rug (or option of one) for my avatar anyway. This was the hardest part. Again, I just photo sourced and pasted. It looked lousy. After a lot of experimentation, I can't even tell you for sure what I did except I sub-sampled and pasted into shape. Used some filters, blur for sure and turned down the opaqueness. Preview. Touch up. Preview. Touch up...
11) Upload it and put on your new birthday suit. If you have a modeler like DAZ and used it a lot, it will probably be really close but not quite right. I just edited my photo shop image while referring to my avatar in SL and previewing the modified file in DAZ. I know have an av that looks a lot like me only better, because I have the airbrushed nipples and naughty bits of a some porn star. In honor of said porn star, I made my breasts a lot bigger too.
DISCLAIMER: The author of this post in no way encourages, discourages the practice or consumption of pornography. The author hopes these women make a lot of money for it and can retire early. Although, that would implicitly encourage pornography...so...yes...Catch 22.
Note to self: DON'T WRITE DISCLAIMERS!