I remember the first time I sat in a figure drawing class and worked from a real, live, nekkid model. I was a little nervous before, as were probably a lot of us wet-eared art undergrads. I don't know how everyone else responded when the young lady dropped her bathrobe, but I expect their experience wasn't too different from my own; there were a few moments of awkward ogling, a few moments of stern and studied pretense at ignoring the obvious, and then - something else. I began to think about how I could wring a good drawing out of the pose. As I started to draw, my brain began to break the model down into her component elements... line and form, light and shadow, muscle and bone. Within a minute, and for the remainder of the class, she registered no more on my libido-meter than a clay pot or a fern. And I was not nearly such a paragon of virtue and restraint as I am now.
Not everyone has had the benefit of such a class, of course, but it did demonstrate to me in unmistakable terms the very real difference between appreciating the beauty of the human form and what might be called the Look of Lust. I had the great privilege of having my view of the female form somewhat redeemed and baptized long before I knew anything of John Paul II's Theology of the Body. In this work, he makes brilliantly clear that the mere repression of lustful thoughts is not enough, and may even be unhealthy in the long run. We must learn - through the help of the Holy Spirit, the teaching of the Church, the sacraments and prayer - to change the way we perceive the human body. We must have our thoughts redeemed. We should work toward being able to thank God for the breathtaking beauty of the human body, and through giving thanks and praise to the Creator, disarm and disable Lust.
The idea is not to cage our lust, but to drag it out into the light where it can be transformed by the Holy Spirit.
Not that nudity is something to be treated lightly. We are fallen, after all. There is nudity - even under the pretext of art - that is wholly inappropriate. If it is intended to excite lust, or if it in fact does so, then it is unhealthy.
How do we tell the difference? Obviously, this is a matter of judgment. For one aware of his own weakness, one sincerely committed to trying to please God in everything, one familiar with Original Sin, one who has been trained to respect the dictates of conscience... a certain amount of confidence in personal judgment is possible, and can be developed. In the words of St. Augustine, "Love God and do as you please".
For one lacking these things, it may be impossible, though I believe that even based only on natural law one can tell the difference between a painting that is basically an act of praise and homage, and one in which the body is displayed like a piece of meat in a butcher shop window. In the first case, the viewer's response is "Yes, that is beautiful - God does great work". In the latter case, the viewer's response is "I want that".
In short, if you are truly concerned about lust in regard to viewing nude figures in art, then the battle is half won already. Trust your judgment, and be watchful of your own thoughts. Where truly great, classical, historically significant art is involved, I don't think even children need be cocooned and shielded as much as one might think. Most children likely have a much saner and simpler response to these things than we give them credit for. If you have concerns for kids, look things over for yourself first, but don't get too wound up over them seeing this or that body part, in the right context.