I think we are definitely seeing more and it is very disturbing. I think that at least part of it is lack of parental involvement. Kids never go outside and play anymore, they are in their rooms on the computer. The parents think that as long as they appear safe that they are safe.
Server side filtering. It can't be defeated from the pc side. You can't download free isp software. You can't get to any adult sites. You can't get to myspace.com. Totally family friendly.
Even incoming email is flitered and suspect ones are blocked.
As long as the kid doesn't have a credit card (to order AOL or some other isp) then they are totally safe.
It runs pretty quick too.