After reading the ruling the thing that seems most pertinent is that Renderosity has nothing to fear on the legal front really. They are covered by both the virtual depiction verbage and the artistic merit verbage. The TOS clause, if solely a legal safeguard, from what I read above, is not necessary. I believe the TOS may have more to do with the value systems of the operators of this site dictate.  (which is well and good - it is thier blood, sweat and tears that created it) The above ruling, to me, is extremely smart as it sees clearly the abusive power it could hand over to the government.

I will say this though - you start down a slippery slope when you start putting restrictions on artists. An artist should never have to worry about creating in the form of the masters, at any rate, as that is an age old precedent and easily identified as having artistic merit - yeah and I mean cherubs too. Depiction of fantastical and mythological creatures should be exempt IMHO. If the artist did not set out to create a depiction of a pure human sexual nature what is the big deal? In fact unless the depiction seems wholly aimed at the sexual gratification of sickos I dont believe that it should be pulled. Though the admins are within thier rights by all means, as I stated above, to make what ever rule they want and  I personally will abide by them while they do not infringe on my artistic vision - that does not make them "right" by the law or ethically.  As a business venture that caters to a global audience I would be extremely extremely careful that my policies did not come off as racist or wholly determined by middle American standards.

"Imagination is more important than knowledge."
- Albert Einstien