just to chime in...
if the kid in question is pre verbal and theres no active sexual practices then it doesnt matter as long as they arent on screen ( mfc rules) if they are on screen i question the wisdom of it simply because of security.
if there is sexual activity thats another line, one which in the western world is probably not a good idea. in other cultures open sexuality in front of children is no big deal, and has not been proven harmful to them as adults later on. that being said sexual exposure is highly cultural in that regard. what works in a primitive tribe wont work in modern america or most of the western world. heck, id wager a guess that most of asia it wouldnt work out well either.
nudity and sex in and of themselves cause no harm when in front of anyone. we are born naked, and nudity is a healthy thing. sex should be a good thing rather than something to be ashamed of, but since the judeo christian values dominate anyone crossing that boundary is likely to suffer social stigmatism. thus it can be deemed harmful if done on a regular basis without proper education and guidance.
the other line is if the child is verbal. by the time a kid can form sentences their brain is going to actively absorb everything else too. so plucking the pink pearl in front of a kid isnt too smart. yes, if everything is explained in an open intelligent manner its not a big deal, but how many people in the world are actually open and intelligent?