Unscrupulous YouTube users have been known to upload porn and name it after children's cartoons just to be 'funny'. Anyone can upload anything to YouTube. You can report stuff that you think is offensive but if your child has already seen it it's too late, the damage is done.
I love YouTube. You can find some great stuff on there. Just please, please tell everyone you know (especially Grandparents) not to let kids browse it! There will be plenty of time for them to hunt out the sickest videos when they get to secondary school.
As a final note, I'll leave you in the twisted hands of Evil Elmo. Sleep tight.