Well, I can only add one more thing to this.
Even if the characters are naked... What does that have to do with sex? I was BORN naked. We all were. We could all undress, and run around naked and it STILL doesn't have ANYTHING to do with sex.
Until you spot two naked or almost naked Final Fantasy characters swapping bodily fluids the game has nothing to do with sex.
Sexy clothes have nothing to do with sex. They make someone look SEXY. Which has more to do with being attractive to the other gender than it has to do with sex. Two entirely different things.
Personally, I couldn't care less if young children saw images of people having sex. We've been doing it for thousands of years. Whats the big deal? We even reproduce through sex. Which is pretty important, if you ask me. Sex is normal. Its been in our lives for thousands of years, and people still make a big deal of it. And preventing unwanted pregnancies isn't the responsibility of developers of video-games. It's the responsibility of the people HAVING sex, or maybe their parents, if they are young. As soon as you find out how having sex is done, actually I prefer the term 'making love' =P, ahem... as soon as you find out HOW to have sex, you'll also learn what the possible result is.
Education is the key. Not censorship. Censorship is baaaaaad.
*throws $0.02 in small plastic cup*
EDIT: Hm. Most of this stuff was already said. I really should start reading these threads more actively.
