I am currently building my own SNS networking website. I want to collect some suggestions from you guys as to how to expand this website and what i should do at this first beginning, Please refer to: http://www.fliends.com
You are on a right direction, but a huge number of legal issues can come after such these sites. Your terms of use seems too short to me and I can tell a lot of points are not made there. Best is to talk to a lawyer.