WHY NOT DESIGNATE CERTAIN VOLUNTEERS as "Regulators" of the most blatant offenses? If someone is waving a gigantic penis in front of everyone's face, why not allow someone at the Welcome Area to first of all inform them of rule violation and then, if they respond with the usual I-don't-care comment, boot them out of the PG area.
I occasionally spend time in Welcome Areas and other public PG sections of SL and am still amazed and annoyed by how often a few users (usually newbies who have nothing to lose) will spoil the experiences of others by using rude gestures, obscene comments, harassing actions, or very "creative" body parts. Sure, you can report them, but the process takes quite a while and really does nothing to stop the constantly reoccurring events. I would like to see SL give the "regulator" ability to qualified volunteers so that public PG areas can be a bit more enjoyable again.