Honestly this is one of the only reasons I use SL and I have posted transformation videos I've made with it. Unfortunately the new viewer doesn't do the body morphing the way the old one does. I still have and can use the old SL viewer but yeah...it is a bit of a downer.
If you wanna see my SL videos you can find them here:
http://www.youtube.com/user/TehNinjaBunneh
Fair warning: Lots of furry and FtM (made more due to the general lack of it than anything else).
I have been trying to do a Race Change video (I've done two beta versions already) but just can't get a decent looking result yet. I think I need to consider showing more restraint in my body shapes with it XD