The best policy is not to invite illegal content. Any idea where moderation over legally questionable content is an obvious impediment to community growth is inherently problematic because it is basically an "attractive nuisance", e.g. a site that appeals to people who think 4chan banning jailbait photos is heavyhanded has baked-in problems in regard to moderation. Despite the passion and emotion about what is appropriate for StackOverflow, the debate isn't about links to free downloads of PhotoShop or cracking commercial Wordpress themes because people who are interested in that sort of thing go elsewhere. Likewise, nobody on HN complains when such links are killed upon posting here. The solution isn't in mechanism, it's in policy at the highest level of abstraction; that of "What this site is about." Good luck.
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