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I would suggest that greater use of other technologies, eg Google Street View or Microsoft photosynth (which can build up "walk around" models from hundreds of photos taken by the public) would be more:
cost effective
accessible
do more to involve Birmingham in the "mashup" culture of the web
The approach with Second Life is cautious (mainly because I'm dealing with it and I'm generally cautious about everything) - we know that it can't deliver everything early adopters suggest. We're pursuing the planning option to visualise major planning projects but not much more than that at the moment.
We're beginning to use the term 'Virtual Birmingham' to refer to the whole gamut of ways in which the city can be digitally visualised from mapping datasets to visualising social media connections.