[split off from Top Tips for Webmaster Legal Issues and the Law! by Mitch]
Not a tip, but more of a question (feel free to split off into new topic(s)).

When you're running a forum, or some other format where people can write their opinions about products or other people, what are the limits on the forum owner's ("host's") liability for libel or slander? Have courts established that a strictly "hands off" policy on content editing by the host frees the host from any liability ("all opinions expressed here are strictly those of the poster, and do not necessarily reflect the opinions of xyz.com")? That is, is a site a "common carrier"? Or is the host still on the hook for material posted by others, if they fail to remove offending material upon complaint? Going further, what if the host declares that opinions expressed are not necessarily their own, but they do censor offensive material, possibly even before receiving any complaints? By editing content, does the host become the owner of that content? If the host is liable to some degree, how aggressive do they have to be in removing offensive or disputed material in order to free themselves of liability? That is, if someone complains that they are being libeled, does the host have to remove the material immediately, or can they exercise judgment and leave the material up if they feel that the complaint is unfounded? I understand that some right-wing groups are using DMCA complaints to force the removal of any material that reflects negatively on them. Are there clear laws and settled decisions on this at state and national levels, or is it still unsettled? How about internationally? If someone writes something, say, in praise of Hitler on my forum, that would be legal in the U.S. but illegal in parts of Europe -- who has jurisdiction?

Some related questions:

In general, is there legal precedent concerning a site's owner ("host") for illegal actions by others? If I'm running a buy-sell-trade-auction site (think eBay) and someone is selling counterfeit goods, how aggressive do I have to be in removing them upon complaint by a trademark owner? Sometimes people (re)sell genuine goods on the "gray market", and manufacturers often take legal action against this (unauthorized sales channels), which can be regarded as harassment. If it comes to my attention that someone is selling fake goods, is it sufficient to have a written policy against that and to remove the sale upon reasonable complaint? Does the trademark owner have to first prove that the goods are fakes? How about if the seller then files suit against me for interfering with their  business? If I give the seller's contact information to the complaintant, so they can examine the goods, can the seller claim that I'm harassing them?  It's enough to give me a headache!

The same problem extends to things like child pornography, hate speech (advocacy of violence), etc. Have the courts found that having a written policy against such things and removing them when brought to my attention (or I happen across them) and in my judgment they are illegal  sufficient protection for me? That is, protection against prosecution for having illegal material on my site, and  immunity from suit by those who claim I'm trampling on their free speech? Since I own the site, do I have the right to regulate others' speech, or (like a shopping mall) is my site considered a public space? Are there rules about what has to be reported to the authorities, and what evidence has to be retained in case the matter goes to trial?

I don't want to have to keep running to my lawyer over each and every posting ($$$$$$), so it would be nice to know if there are some well-established rules and case law to rely on.

OK, Mitch, you asked for it! Here's a can of worms and here is a can opener...

Also just split this off into it's own thread - a very interesting conversation starter, for sure. 

Would really love to hear some more opinion on/about this.