Well.... I was touching on procedures on how it's possible to do everything in PS...... I don't much of Second Life or whether it would work in SL.
I was about to suggest Poser as it uses Ray Trace and may reproduce the smoke effect but uncertain how it's done and whether the files can be of any use with SL.
Ok, first, in principle, yeah. If it could do the smoke, as needed (i.e. loopable, which is not so certain), then the render would just be a jpg or a png, which just means copy and paste.
As to what Second life currently supports in terms of texture... It can import mesh, but that is.. probably not a good idea in this case, since that just gives you a container. It can't do "media", so, its not like I can just make a tube, and stuff smoke in it, etc.
Second Life does support - normal maps, specular maps, occlusion maps, a very limited, and primitive version of displacement map (called a scuplty, or.. prim torture, it was the pre-mesh method to get complete objects and limits the displacement to the vertices of an object with **exactly** 64 points, or something like that, if I remember. I never did get any good at making there things..), and, or course, ordinary textures, including transparency in the image.
So, nearly anything you would use to do CG any place else, assuming you have some clue how to do any of them. lol
But, yeah.. its probably easier to produce almost **all** of those things in a something like Blender, or Maya, or what ever, *except* the straight "texture" part of the whole thing. That.. Well, unless you know how to write shaders, you are lucky to have something that writes them for you, or you are good with Photoshop... lol I am, in order of those items - not a clue, even less clue, and rank amateur.
Now.. if only one of these things imported POVRay textures, instead of only exporting mesh "to" that rendered... But, they more or less can't (it would be back to that, "Please write a shader for me that does exactly the same thing." problem.)