Well, on one hand, I think that prostitution should be legalized, although I think they should establish some safety guidelines: for example, STD tests from a neutral third party for both the prostitute and the client, so that both are fully aware of what they may be getting themselves into. Perhaps an agency...a legalized brothel, I suppose you could say, with as much data protection as possible for both prostitute and client. Ultimately, it is their choice to engage in such business, and their problem if they contract anything as a result of it, but that is going to lead to all kinds of mess to the point where it becomes more than just their problem, and if prostitution were to be legalized, the government should try to minimize the risk of any unpleasant consequences, for both sides. You can only be careful so much, after all, and if it WAS legalized, I imagine we'd see court cases about transmission of STDs and all the rest.
But, that said, I don't think society is quite accepting enough yet to allow legalized prostitution. People are inevitably going to look down on others if they make the choice to sell their own bodies, and that is going to lead to all sorts of issues, because society as a whole just cannot accept that people don't have to conform to their expectations of what they think is proper behaviour when it comes to their personal life. My personal opinion is that morality is an irrelevant concept, but unfortunately that isn't how it works in real life, and morality would no doubt play a major role in it, because in terms of general "right" and "wrong" society as a whole puts prostitution firmly on the side of "wrong" and it is going to take a much better argument than just "it is their choice" to convince the majority of people that this sort of thing should be legalized. As long as the majority don't accept it, there are always going to be problems, so with society in the state of mind that it is now, not only will prostitution not be legalized, but it shouldn't be, because it'd stir up so much trouble it'd be unbelievable.
So, whilst I think it should be legalized, because people should be allowed to choose whether or not they want to sell their bodies (provided, of course, that they aren't endangering anyone else) I don't think it should be, because legalization isn't going to equal acceptance, and its just going to complicate matters. A lot of people can't even accept homosexuality yet, and that is an issue that has been raised far more often than prostitution, at least in the media.