Ok... I don't want to open up a floodgate of negativity here, but in my opinion, no matter what the situation, these kids are still just that... kids!
I say that to relay my feelings that these kids need some normalcy (is that a word?)
in their lives. They already deal with various caseworkers, doctors, therapists, etc. etc. etc....
I totally agree that you need to be very careful with who you trust your kids with. I would never let my son go to a friend's house without knowing the parents, and as far as spending the night, I would have to know them very well. I know that it is no guarantee (what in life is), but I trust the families that we know in our church... we have known them for a number of years, and have had a lot of different situations to interect with them. I would trust them with my son overnight, as they would trust theirs with us.
You can always be the "host family". Have your kid's friends over to your house. Take the kids camping. The point I want to get across is that you work hard to get your kids to have trust and security... it undermines that if there are strict rules that "they can never spend the night with anyone" or "only be in their beds every night".
I think it is hurtful for kids (of any situation) to be raised with a fear of everything... being sheltered from the world... boys get hurt playing football, girls get hurt playing soccer, or whatever activity they do. They will grow up and be on their own... they need to learn life skills of dealing with different situations interacting with people.
Let the kids be kids, and have fun!
Again, no offense toward anyone... just my 2 cents.
D