I have joined up for the sole purpose of adding my (late) response to this conversation.
The username I have registered here is the same one as my online alias on MM, to keep things simple- and I'll lay out some basic information about myself and MM.
I am, as of 2011, 14 years old. That particular milestone also makes clear how long it has been since I joined MM- late 2009. I like to think myself as an internet-aware person, steering clear of things that would be dangerous or potentially harmful to myself and the computer.
Moshi Monsters, the forum, and the people on it, have never caused me any alarm. The stories people paint of MM are often quite horrifically negative- but quite honestly it is in the distinct minority of times that anything like that happens.
To take another example- the forums. The forums are, I would suggest, not suitable for under 10s. The age demographic of a lot of the forum members(myself included) is now usually in the 10-13 range, and although the forum is on occasion slightly brusque in conversation topics, once again nothing has ever caught my eye that alarmed or disturbed me to a sufficient degree to click away.
If you are trying to protect your children from Moshi Monsters, I am slightly bemused. So long as you have told them the risks and advised them of when to get them(say if they inadvertently clicked on a virus) to be helped, there is no need for privacy settings, no reason to protect them from the website. I have been totally left to my own devices on the internet since I was 10, and have never been worried by anything I saw on the Internet. Moshi Monsters is a tame website with no reason to worry, so long as you have kitted out your children with knowledge of the Internet.
Feel free to debate my point as you wish.