Apparently the parody site challenged SL to send a cease-and-desist letter, but instead they sent a letter declining to sue.
“Linden Lab objects to any implication that it would employ lawyers incapable of distinguishing such obvious parody,” [Second Life’s attorney Ginsu] Yoon wrote. “Linden Lab is well-known for having strict hiring standards, including a requirement for having a sense of humor, from which our lawyers receive no exception.”
– Blogger gets ‘un-cease-and-desist’ note – Yahoo! News