My daughter, who is 14, lets me have her MSN password. She's fairly sensible and tends to delete contacts that act inapropriately, one of whom was a 45 year old man who really frightened her at the time.
I do think you need to be honest tho. If there is trust and you are open with each other, the children shouldn't be too afraid to tell you. However, if you break their trust they will start to hide things from you.
It's hard to decide where to draw the line with children because they
do need protecting, but they also need to be treated with respect.
I guess every parent needs to do what they feel is right for them. And nobody knows their own children better than a mother