I'm guessing they might use the network to set up an assignation, then arrest whoever showed up. I have heard that many officers enjoy playing computer games at the station during work hours. This form of entrapment could be that sort of game. I imagine bulletin boards could be developed on which pros could post ads. Basically, your understanding is correct here.
Commerce is okay, so long as it's confined to appropriate newsgroups.
I think the Net has a strong Libertarian bias, so that sex workers would likely find a more appreciative audience there. I'd say risks of that sort are pretty minimal. An aggressive prosecutor might try to characterize such a network as a criminal conspiracy, but I think so long as the information there is not aimed at solicitation or conspiracy to commit crimes, but instead is focused on listing known dangerous persons, there could be no legal prosecution of the enterprise. If you're new to this site, we strongly recommend that you visit our home page to get a better sense of all that we have to offer.