Understood. This is more or less the same way I do things, though I do permit myself to consider impromptu changes where I come to see an opportunity that I didn't see before. This whole issue is a prime example of this.
I wonder if I can accurately get across my feelings on this; thing is, this is a particular issue and quite seperate from how I might handle others, because it provides opportunity I didn't forsee; this isn't the only time I've gamed with people of differing orientation than me, and I think its important. To be honest, and this might make me a bad person, but I don't really want to put in too much thought about sexual orientation, and I don't want to have to be politically correct.
I think this discussion has helped me to decide to be non-committal (is this an oxymoron?

); I don't bother to assign a sexuality to my characters, and have the default assumption be that if a character approaches an NPC, my decisions will not be based on a planned orientation, but on whether they are compatible. This could be extended to an assumption about the world (whilst most people are heterosexual in my game world, there is absolutely no barrier or stigma to being otherwise).
It could very well be interesting to throw in the twist every now and then that a particular character hits on another, and it turns out that they have an opposing orientation; but I'm leaning more toward not bothering with this because I don't want my game to become a modern soap opera
On the subject of just when to draw the curtains, I agree completely. Going too far is going to make that freaking weird.