Sorry, the cat hit the send button!
Re: your responsibility for illegal content and pornography, etc., I
really don't know what to say. Technically, I believe the TOU could
be interpreted to say that you are responsible for such things, but
then again, you also have two things going for you:
1) As long as your site is not related to illegal content and/or
pornography, etc., your users will likely steer clear of searching for
such things, just like people don't go looking for shoes in a
furniture store.
2) Since there is ultimately no way that you can control how the end
user will utilize your application, I suspect that even Google would
be hard pressed to hold you liable for uses which were clearly outside
your intended purposes, just like we don't hold the auto makers
responsible for all the people who use their cars to speed. The car
manufacturer built the vehicles assuming that they would be used for
legitimate purposes; it was the driver who decided to break the law.
Again, if you have any doubts whatsoever, you should consult a lawyer,
but I think you'll be okay as long as you're not encouraging people to
search for inappropriate things with the rest of your content.