Is gaiaonline bad?
GaiaOnline tends to be safe; it has (somewhat) strict guidelines on content (not really to restrict profanity, but to keep it usable for a PG-13 audience). Also, in general, the community of Gaia is more mature than that of MySpace on touchy subjects and the moderators are faster to react.
Some might say that Gaia Towns has a lot of obscenity in it, and sometimes it does, but its easy to ignore it as there are many more mature members there as well.
If you have a problem with profanity or anything you might see in a PG-13 movie, however, I wouldn't recommend it.
Unfortunately, Gaia has a problem with hacking, but that's common across the internet. If you or your child does get "hacked" (mainly means your account has been accessed without your permission, this can happen many ways ranging from a keylogger on your computer to you giving your password out) they are able to fill out a hacking form which is reviewed. In most cases the items are returned, though sometimes it isn't completely possible. There is no guarantee that everything will be recovered.
Such forms only take a few weeks to be dealt with because of Gaia's sheer size, so a little patience is required.