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I suggest that you incorporate. I know this sounds like 'overkill' for a lot of webmasters but let me assure you it can be done for approximately $150 (at least in the states) and it places a legal 'border' around your business.
James, This is important in your case because it means that any lawsuit or action can only be made against the corporation - not against you personally. Therefore all YOUR possessions (house, car, savings account, etc.) are safe.
In my case if I were ever sued they'd get a few hundred dollars, a computer and a chair.... Not worth their time to go after my corporation.....
JohnJ
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