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.