Chris,
I would recommend using an external "physical" mixer and then using the output of that (via your PC sound card input) into "Second Life".
My guess is that "Second Life" doesn't see the PlayIt Live output correctly for some reason (I've never used Second Life so I can't be more specific).
I might look at a small simple mixer (like the XENYX Q502USB) for this application.
Use the PC sound card (with the PlayIt Live output on it) as an input to one of the mixer line channels, your mic into the mixer and mix on the rotary faders.
The mixer USB sound card can be the source of audio on "Second Life" (possibly it will need to be the "default sound device" and use the mixer USB sound card output as a headphone feed from "Second Life".
I think this is likely to work.
Hello Joshua,
Chris never replied so we never found out how he got on. The advice still stands. However, depending on the budget, I would now look at the Yamaha AG-03. I've never touched one but on paper it looks good for this application.
http://usa.yamaha.com/products/music-production/interfaces/ag/ag03/
Chris Thacker
I use playit mainly ot Dj over a virtual world second life where i DJ events and clubs and such however with the microphone extension Ive noticed that if maximize second life to focus o n the group and chat that my microphone refuses to work wit playit even after I did a sound check earlier to make sure it works fine. My voice is off on second life Skype is off so nothign should interfere I was wonderingwhat I can do to fix this