http://www.nytimes.com/2010/07/19/technology/19screen.html
"Flagged videos are then sent for manual review by YouTube-employed content moderators who, because of the nature of the work, are given only yearlong contracts and access to counseling services, according to Victoria Grand, a YouTube spokeswoman."
Also, I know this is going to be an unpopular opinion but, it's this kind of problem that puts forward the strongest case for increased online surveillance. I understand it's unfair that everyone will be punished for the actions of a few, but I'd rather be under surveillance than have more damage to the personal lives of these content moderators. Maybe we just aren't yet mature enough as a species for the fully open web we used to have.