We had a conversation about Google & porn in another thread. I think Google is doing some testing, to see what the User's reactions will be if porn shows up in searches. The basic question I think is if delivering porn-related search results is something that Google deliberately trying to avoid, or deliberately trying to get into. I don't believe there are any accidents.
I think the flags are there to define the boundries of what people find acceptable or offensive, and Google is going to deliver results right up to that limit, no matter what the content. Meaning, if Google can make money off of porn, they are going to.