I'm with Honkworm, no need to walk around the house in the nude all the time. However, I think nothing of a family seeing each other nude at times. As long as there's nothing sexual about it. Come on - you guys can tell the difference, right?

I know I'm European and we're less freaked out about nudity than Americans tend to be. It was quite normal in my family that we saw each other nude on occasion. I think I showered with either of my parents until I was about seven. My dad would always be flaccid, though - of course! When we stopped showering together, I'd still see my parents nude or semi-dressed at times. Unintentionally - you know, I'd walk in on them in the bathroom or something. Never, ever would my parents run around naked when we had friends over, though!

Sometimes I'd go to public swim halls with my friends, and I'd see their mothers nude showering before or after swimming. Quite normal, we thought nothing of it.

So: Respect your kids privacy, don't make them be nude around you when they prefer not to, don't force your nudity on them - but when they do see you naked, don't make a huge deal out of it. In my opinion it's perfectly natural to be naked around family members when it's in a non-sexual manner (like in the sauna, the gym, or when getting dressed).