Do you allow playdates and sleepovers with school friends?

Last month on Mama Said, Sarah and answered questions from our readers. One question about playdates prompted an interesting discussion in which Sarah and I shared our reservations about letting our kids go to the homes of friends we don’t know well. We’re also both a little leery of the sleepover situation.  

What’s your rule in regards to playdates and sleepovers? How do you communicate your rules with other parents (and with your kids)? Do you think Sarah and I are being paranoid, or is it worth the awkwardness to be cautious when it comes to this stuff?