It's a bit of a double sided blade for me.
If you let your kids wander social networkng sites and the wider net freely, then, just like walking in the street, they're likely to run into some kind of trouble that they don't know how to handle. But in the same stride, try to hide the "outside world" from them and they will simply rebel and "run into the streets" while you aren't looking (If you're following the dual analogy).
There is the one solution that has been true since the dawn of time...
Watch... Your... Kids...
Just like walking down a street, you need to be side by side to your child to know what they're doing so that when they do inevitably walk into a problem, you are (like the good parent you should be) there for them to show them a responsible and effective way of handling the problem.
In stern agreement with Cryos, too many parents are simly focused on their life and their social network that they forget exactly how much of their childs' development is constructed from the actions that they take, so when a kid sees his mum ignoring him because she's on facebook, then when he's on facebook, he ignores her. This digital age may have raptured the populace of the world, but I still remember that communication, by any means, is how we all learn, so I don't jeer Facebook, but I do wonder why people see it as someone's safehouse instead of the city that it is.
Seeing it like a city is quite a good guiding principle being that:
1: you wouldn't put pics of your "assets" all over the city.
2: when someone offers you something, you're skeptical, giving you time to judge trustworthyness.
3: you wouldn't leave your kids to roam around the city alone unless you felt they were fit to do so.
But keep in mind, advancements in our "digital city" create new problems.
1: When you moan, people "hear" it long after you've moaned and your moan will probably circle round to the person you're moaning about.
2: Now, the "ice cream shop" (any untrustworthy site) is linked with your "market" (facebook), so every time you visit your market, it keeps offering you icecream.
3: The shops NEVER forget who you are, what you bought, when you bought it and what else you were looking at when you were browsing.
These are not complete in any way, shape or form and it would be quite amusing to get people pondering all the ways in which the internet is just as public a place as the highstreet, but we'd be here forever. The simple fact is, watch your kids and teach them how to walk. They're being thrown in this face first while we've all had time to adjust to this second world and just like real life, we know how to avoid danger, they don't, watch your kids....
(Btw, thanks for starting this topic. It's refreshing to find high brow intellectual debate alongside power-gaming.)