I think Blockland being played online should be Rated T, because Children interacting with many adults, and plus all the predators out on the internet, but offline or in LAN the game is good for children. That or just watch them and play with them.
Don't flame me because of this, just what I personally think.
If you're concerned about the chat, you can disable it in the "Advanced" tab of the Options dialog ( Set "Chat Line Time Milliseconds" to 0)
I don't think that genitalia made of bricks is that much of a problem. Really, how explicit can you get with bricks? I suppose you could do a pretty decent job if you worked at it, but I have yet to see anyone put in that much effort. I would say that Blockland is as safe or safer than any online game that allows people to host their own servers. It is safer than using instant messenger or myspace.
Badspot, in Blockland 0002 I saw some people working hard to make a "pr0n town" and they actually modeled out a thing with a research picture on it. They don't have to build it.
