I met 'Lalinda', the creator of 'Wonderland' in Second Life once. She(he?) called me intolerant for not wanting to cyber with her after I saw she's playing a child avatar. I felt sickened then as well and told her to fuck off.
But this report doesn't make me happy at all. I'd wish the pedophiles to be gone from SL, sure. I don't want to risk being sickened. But I don't believe those people deserve to be imprisoned just for what they did in SL. (investigating them for having real child porn photos would make sense, though)
Now, when the report touched the matter of 'rape roleplay' and 'torture', I'm quite pissed. I'm not ashamed to admit I played an (of course adult) rape victim or a non-consentual torturer quite often. Pedophiles be damned, but I don't trust the 'net police' to be open-minded towards everything else that can be done in SL. Lots of people I know in SL, who certainly don't want to see pedophiles in SL are still very concerned that 'they will be next', and I'm not suprised that they are.