Mantis#2796. Thank you kindly, Gerhard for a patch that addresses:

On a call of llVolumeDetect(1) (or any other number !=0) volume 
detection is enabled. Together with VD, the phantom flag is set to the GUI.
On a call of llVolumeDetect(0), vd detection is switched of again, 
also the phantom state is removed. On a call to llSetState(STATE_PHANTOM, 
false) while VD is active, also VD is switched off. The same is true for 
unchecking the phantom flag via GUI. This allows to take back VD without 
the need to script just by removing the phantom flag.
Things missing in this patch: persistance of the volume-detection flag. 
This needs more discussion and will be included in another patch soon.

1 files changed, 19 insertions, 1 deletions

diff --git a/OpenSim/Region/Physics/OdePlugin/OdePlugin.cs b/OpenSim/Region/Physics/OdePlugin/OdePlugin.cs
index 7589750..c0b4b45 100644
--- a/OpenSim/Region/Physics/OdePlugin/OdePlugin.cs
+++ b/OpenSim/Region/Physics/OdePlugin/OdePlugin.cs
@@ -797,7 +797,25 @@ namespace OpenSim.Region.Physics.OdePlugin
 
                 #endregion
 
-                if (contacts[i].depth >= 0f && !checkDupe(contacts[i], p2.PhysicsActorType))
+                // Logic for collision handling
+                // Note, that if *all* contacts are skipped (VolumeDetect)
+                // The prim still detects (and forwards) collision events but 
+                // appears to be phantom for the world
+                Boolean skipThisContact = false;
+
+                if (contacts[i].depth < 0f)
+                    skipThisContact = true;
+
+                if (checkDupe(contacts[i], p2.PhysicsActorType))
+                    skipThisContact = true;
+
+                if ((p1 is OdePrim) && (((OdePrim)p1).m_isVolumeDetect))
+                    skipThisContact = true;   // No collision on volume detect prims
+
+                if ((p2 is OdePrim) && (((OdePrim)p2).m_isVolumeDetect))
+                    skipThisContact = true;   // No collision on volume detect prims
+
+                if (!skipThisContact)
                 {
                     // If we're colliding against terrain
                     if (name1 == "Terrain" || name2 == "Terrain")