IMHO (and I think others have said this too), is to rely on the moderation/consider system.
At the end of the day, when you start talking about censorship, then you start talking about _what_ might be considered offensive. If you start with swearing, doesn't it naturally follow that innuendo is also unacceptable? Then you get into implications regarding taking drugs. Is that unnacceptable? What about opinions you don't agree with?
Regarding swearing, well, what do you consider swearing? Don't forget that a many of the current swear words, are context (and linguistic region) dependant. "Ass" has one of the definitions (and IIRC the original definition) listed as:
Any of several hoofed mammals of the genus Equus, resembling and closely related to the horses but having a smaller build and longer ears, and including the domesticated donkey.
A vain, self-important, silly, or aggressively stupid person.
Is that swearing? If I used it on the context of 'a mosquito bit my ass' does that then become swearing? Far too fuzzy a line for my liking, and not something to make rules/guidelines about. Use your common judgement and consider a node that you find offensive...
I most certainly don't agree with using **s all over the place. It really doesn't hide anything, it just looks daft. (A word with a * over a letter is still recognised by people who know it, and know what it means, and the situation remains unchanged for someone who doesn't recognise it.)
Filtering should be watched and is icky. The classic example is for a long time no one in Scunthorpe (a town in UK) was allowed to sign up for an AOL account :)
As an alternative to filtering posts, I might suggest allow regexp filtering on 'things you read'. So if you don't want to see swearing, then you don't.
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It's not pessimism if there is a worse option, it's not paranoia when they are and it's not cynicism when you're right.