I don't see anything wrong with checking what your kid is doing online, I even think its a good idea to have a decent idea what your kid is doing while on the internet... the world is full of wierdos and kids don't need to be involved with them and their sick idea. If watching your kid's every move online is what it takes to keep them safe, then so be it...
I think bballad said it best when he said:
Do I trust my kids, yes, do I trust the nut jobs on the net, no. So I have two chocies, eaither shater my kids innocence at a very young age, or let them grow up on their own but monitor their actiities to make sure they don't get hurt.