Hey Clocker .... what did you expect? This is Storage Forum, isn't it? Sensible, on-topic answers to practical questions? Here? Nahhh.
And just by way of sticking with the well-trodden tradion, I'll ponder your question afresh .... Well, ponder the broader question behind your question. Maybe that will end up throwing some light on the practicalities in the end, maybe not.
What do you do with this issue? It's really, really tricky.
First up, forget software. If there is a practical, usable net nanny style of app that actually works properly, isn't relatively easy to get around (for the determined child), and doesn't totally screw up your system, then I'll cheerfully eat the box it comes in. (With or without salt.)
In fact, I suspect that this isn't a matter of no-one having written any decent net nanny software yet, but rather an inescapable reflection of the incredible complexity and subtlety of human culture, and in turn of the internet that mirrors and distorts culture. The task is beyond the capability of any software package yet devised, and probably beyond the capability of any software package that it is possible to imagine, short of an improvement in our ability to write code and build machines for it to run on similar in scale to the improvement that has taken place between the end of WW2 and today.
(BTW, I imagine that most net nanny apps rely on IE and its derivatives. If this is so, then you are immediately in deep trouble spyware and trojan-wise.)
So, if not software, what else is there? Parental supervision? Well, yes, sort of, but in the modern world, it ain't practical. No-one has the time, what with work commitments, needing to have an actual life of your own (and yes, every parent needs that in order to remain a real, fully human person and thus a good parent), and the many commitments on your time that an industrialised society makes. Worth the attempt, sure. But clearly not a complete answer.
Censorship at the source? Legislation, commitees checking content, all that stuff. Not a hope. It's (a) impossible, and (b) highly undesirable. You want to live in a police state, go book your ticket to Iran or possibly China right away. But even in those places, it doesn't work properly. (Thank God.)
Preparing your child so that he/she is able to make his/her own way in the world and make sense of things, so that the child understands and can make informed choices? Well, of course. But this takes far more parenting skill than most of us can lay claim to, or even sensibly aspire to. It's really, really difficult. There are just so many things we need to prepare a child for, we don't understand all of them ourselves, and the pace of the jackbooted march of commercial culture uninvited into our living rooms is such that only a fair-dinkum Super Dad can hope to catch up with it, let alone get far enough in front of it to head off evil influences. And the reality is, that Super Dads or Super Mums are very few and far between. In my life, I can think of two people I have ever met that I would class that way - i.e., as good enough mothers (they were both women - which may well be no coincidence) to really equip their children for life, including dealing with mass-media nasties, amongst other things. The key difficulty here is that you need to be able to understand the nasty in question (which is not always as easy as it seems) and understand and be able to communicate effectively with the child - not easy, and a very rare ability indeed. Hardly anyone understands children.
That seems to leave only one answer, and it's one that no-one here (except perhaps Mercutio, and maybe P5 and Clippy) would seriously contemplate. This is to simply unplug the damn thing.
Now myself, I'm not fussed about the internet, not especially. If I had children, I'd be relaxed about them having free and unrestricted access to it. But I am fussed about TV. If I had children, I'd not have a TV set in the house. No way. The outpouring of evil propaganda that comes out of a TV set every day makes internet porn and other assorted nasties look utterly trivial, quite beside the point. But no-one will agree with me here. (Again, except for the few I just mentioned, and one or two others - Mubs, I bet, is one.)
(PS: I think I'll just post this without reading it over, as otherwise I'll be tempted to edit it so that it makes sense, and after a half hour or so I'll realise that it's a task that would take weeks and just throw the whole post away.)