I used Blender 2.7, the fitted mesh survival kit, and a shirt from Damien Fate's free clothing mesh.
The most important tidbits?
- When weighing, four or fewer bones influencing each vertex. This means you can't just copy the weights from the avatar models. The area around the shoulders has a LOT of influences.
- If you aren't using some of the collision bones, you can delete their vertex groups and the mesh will still upload into SL. You cannot do that with the normal bones.
- Don't have the joints box in the SL viewer uploader checked.