Little Fayoumis is not really online much, and he's not fully reading yet. He's on one and two syllable words, at grade level with first grade. As such, lots of innuendo goes ZIP over his head. I was reading all kinds of stuff when I was a kid, and it does very much go over the head. I went back and re-read some of the Star Trek that I'd been reading, and I was shocked, et cetera, that I'd been reading it, because it was so very racy.
We've explained that we need to watch any R-rated movies *first*, to see why they get the R rating, and then we can decide whether it's appropriate for him to watch them or not. We look at scary, gross, and confusing. He gets to watch most of Matrix: Reloaded; we'll have him leave the room for the Trinity/Neo sex, and have him not watch the cheesecake bit.
He gets to watch Strongbad (http://www.homestarrunner.com/) and some South Park. He does *not* get to watch Happy Tree Friends (http://www.happytreefriends.com/); he does get to play Mortal Kombat.
My parents requested that I please not read any Sweet Valley High books, because they were trash. (Every now and then, I would sneak a few home from the school library. I don't think they ever found out.) I plan to find some particularly disgusting but harmless series of books to bitch, whine, moan, and complain about ("Oh, god, you're reading that crap? Bleugh.") so he feels like he's getting one over on me. For anything that I have a serious problem about him reading, I will explain carefully to him why I don't think it's a good idea that he be exposed to it at this point in time, and request that he not get into it, but say that if he is exposed to it, that he may and should ask me about the things about it that scared and/or confused him.
When he does get to reading stuff online, I will teach him to look at the ratings and read the summaries first. We're probably going to let him read PG-13 and below stuff, when he gets to reading. If he sees an R-rated or above fic that he really wants to read, he should ask us to read it first and see if we think that it's OK for him to read it. If we don't think it's OK, and he still wants to read it, I'll probably just go through and snip out the way-too-intense bits and replace them with summaries if possible. "There was a lot of kissing and mushy stuff."
I do appreciate it when authors of really interesting stories make it easy on anyone who wants to skip the sex bits, by saying something like "NC-17 rated chapter; $CHARACTER and $CHARACTER have some private time together. Not important to plot. Click here to read their private scene; click here to skip and continue with story."