Flutterby™! : Virtual porn and issues of legality

I'd run across this video of seam carving for content aware image resizing, but recently Elf linked to it and Jamie Hayes and Alexi Efros's "Scene Completion Using Millions of Photographs", and started to muse:

It's probably revealing that my first thought while reading the abstract was, "Oh, cool. It shouldn't be too hard to create a detect pixilated region algorithm. If I use that to 'damage' the picture and the Scene Completion algorithm to repair it, I can restore an awful lot of important, uh, semantic detail to all those censored images on the a.b.p.e.asians.* newsgroups."

Hell, 99.44% of those images are photoshopped anyway-- not counting the pixellation. Nobody's going to care if her pubic hair is borrowed. The Internet views censorship as damage and routes around it; all I'm doing is trying to help.

Then he took his musings on potentially using image similarity and some of the techniques for figuring out what's naked skin a little further:

So, you run this program against the flickr group 'bikinis', or the Google Images search term "in a bikini". What's the likelihood that this algorithm, completely innocently and without human intervention or consideration, will produce something arguably illegal?