Meet SmallWorlds, a free browser-based 3D virtual world that integrates YouTube, Flickr, and a number of other Web 2.0 services. The site is aimed at the teen and adult markets, and is designed to be more casual than Second Life. SmallWorlds will be entering a public beta on June 2, but the first 1000 users to register herewill be able to start using the site on May 26.

Update: The first 1000 TechCrunch readers to send a request to techcrunch@smallworlds.com will get an invite within the next 12 hours.

SmallWorlds revolves around a characters’s room, which resembles a house one might find in The Sims. Users can furnish their rooms with TV sets that feature YouTube videos, posters of Flickr photos, Twitter messageboards, and stereos blasting tunes from Last.fm and SeeqPod. Then they can invite their friends over to their rooms, where they can view videos, photos, and songs together – a feature that will likely have mass appeal. The site facilitates meeting up with friends by assigning each room with a unique URL that will immediately transport avatars to their destination.

The site has a lot of potential. The virtual world looks impressive, featuring a 3D isometric perspective and highly customizable avatars. SmallWorlds is also releasing an API that will allow developers to create widgets that can be shared with friends (like games or other media offerings). The site was designed with Flex, and the company says it should work in any browser that supports Flash 9.

Users have been clamoring for a service that lets them view and comment on web media simultaneously, and SmallWorlds’ approach may be ideal for their target audience. We’ve seen a recent wave of similar services from the likes of Userplane and Videophlow, but these are basically just chat windows that sit next to a media viewer – there isn’t any of the interaction you get from a virtual environment.

On the other hand, there are already a number of well-established virtual worlds, including IMVU and Habbo Hotel, which may make it hard for SmallWorlds to gain traction.

