What's exceptable?

I have teenagers - 16, 15, and 12 (technically a tween, I guess).  I do not allow them to swear in front of me.  This includes all the PG-13 + ones, plus sucks and pissed.  There may be more.

I'm under no delusions about what they say behind my back.

On the other hand, my 8 year old and up use crap, and somehow that doesn't bother me - depending on context, of course.

I hear kids all the time saying "that sucks" in front of adults, their parents, whomever.  To me it's a crude expression and I don't want my kids in the habit.

My theory is, if they can clean up their language in front of me, they won't be as likely to "slip" in an embarrassing situation - a job setting, school, in front of someone who would find it disrespectful.

Do you think kids are too loose with their language these days?  Or is it not a big deal?  Are there words that bother you more than others?  What age is acceptable or what situations are acceptable to use foul language?