To be a participant observer on a site, you need to really participate. If you are studying a karaoke site, you had better start singing! As you pick a site to study, make sure it's one where you are comfortable participating.
There are many wonderful, cheerful, upbeat, appropriate sites to study. Places where people make music together, or discuss important issues. For most people, studying a site like that is the right choice. There are also some dark, scary places online, where users do the most shocking things. Generally, we discourage students from studying sites like that. But we don't forbid it. If you choose to do so, there are some things to think about:
This creates a methodological problem. If you really want to do participant observation with hooligans, then you have to become a hooligan. But for assigned class work, you can't become a hooligan. You represent GT in what you do for your project. Most importantly, under no circumstances can you participate in anything illegal or obscene, or seem to be doing so. You may not swear. (Using punctuation creatively is allowed, i.e. "Oh #$@$@!")
You must reveal who you are and use your real name as part of your login on the site you study. Not doing so requires special permission from the instructor. You are revealing to people on your site that you are a researcher studying them. If you're not comfortable doing that on your site, you may want to think about picking another site.
Studying a site like this requires a lot of maturity, a thick skin, and a cool temper. Think hard about what you're getting into.