I think that it is important to let children out to play - there is nothing worse than a 13 year old that can't cross the road by themselves. The trick is to get the balance right. It is possible to give the impression that they have freedom but at the same time controlling the risk. My kids, almost 7 and almost 6 get out to play in the front, but must come and ask me before going into any of their friends houses, they are not allowed out of the cul de sac and they are unaware that I am watching them out the window!
They have only been allowed this over the last year, prior to this, I was always out the front with them.
My neighbours however let their 4 year old out to play and half the time I don't think that they even know where he is. He goes in and out everyone elses house and his parents have been known to assume that he is with someone else and go to the shops! I don't allow him in my house at all as I wont be left with the responsibility should his parents disappear.
That said, we do live in what would be called a "safe" area, but you just never know who your neighbours are really!
What I am dreading is when they ask for a sleepover at someones house.