It is all relative, and as long as you parent your kids things will be ok
When my son was about 5/6 I had him play midnight club and all of a sudden we hear him giggle , he had found that he could corner civilians ans run them over.. and over and over again ..lol who needs GTA ..?
Now he is much older but up to about a year ago the only m rated game my son could only play was halo. Now(he is 13) we play gears and L4D together. He cannot play those online without me tho, and it ends up he never plays them at all without me. It is something we like doing together.( yay coop)
My other two kids are girls and much younger.. so it is different.
I divide my games in groups, stuff they can play without me, Stuff they can only play with me or mom in the room or when we play with, games they can only watch me play and games they cannot be near ( those games I buy less and less because i have no time to play them since they are always around

) , It all depends on the game too,blood and gore + language might warrant closer inspection and restrictions but lets say gears with content filter on works good for me . Horror /slaughter games are already a no. Shooters and fighter can be considered violent but i have no problem with those. My girls love to play street fighter with me .
It is really on a case by case basis.. One funny moment for me though was when I was playing cod4 and the helicopter/snipe scene happened. I had not realized that my daughter had walked into the room and sat behind me, I shoot the chopper down and I hear a load MWAAAAAAHA HA HA HA HA HA HA behind me :lol .. man she does haev a mean streak lol