Ask any anime fan, and they'll tell you: cartoons in Japan are different from their localized counterparts. Last night on Japanese TV, the issue was explored for the Japanese viewing public, who was surprised to learn that English language versions of anime are edited.
The show was Sekai Marumie! (世界まる見え！ or "The World Exposed!"), which is hosted by Takeshi Kitano, and it features a panel of foreigners, who show clips or surprising news from their country to Japanese viewers. On yesterday's show, the American panelist ran a segment on how anime is changed when it makes the leap to the English-speaking world. Possibly NSFW images to follow.
While, yes, Japanese pornography is censored, most TV anime isn't—because, well, most TV anime isn't pornographic. What's more, Japan has traditionally been able to separate drawings and real people as well as nudity and sex. Therefore, it's not uncommon to see private parts, even in anime aimed at children because nudity isn't being equated with sex.
With Japan's bathing culture, there's a long tradition of public nudity at public baths (銭湯 or "sentou") and hot springs (温泉 or "onsen"), so Japanese people are generally not too fused with the human body and being naked in front of strangers. Censorship in adult entertainment doesn't necessarily reflect the country's attitudes towards nudity as the contentious issue is with the depiction of explicit sexual intercourse. Generally speaking, government censorship does tend to clamp down over issues of obscenity, which it often equates with eroticism or sex.
America, however, has explicit pornography, but much more reserved rules about what can be depicted on TV—especially in cartoons. The contrast between the two cultures and how they view both mass entertainment and nudity is stark and fascinating.
On Sekai Marumie!, a clip from anime InuYasha was shown. In it, the Japanese version showed female breasts; however, the English language version edited the breasts out. Another clip showed how in the Japanese version of anime Beelzebub, baby Beel's ding-dong is clearly visible in one scene. When that scene was localized into English, the character was put in diapers to cover his baby bits.
While stuff like this is common knowledge to many Western anime fans, it was interesting to see the reactions from Japanese panelists on the show (as well as those of friends) to how anime is altered. Many were totally unaware of these changes and felt that localizing Japanese anime for other cultures was no easy task. Localization isn't merely changing the language, but ensuring that the imported version jives with the local culture—hence why it's called "localization"!