I still think one cannot underestimate how much emotion is involved in sex - of course when one is in a loveing relationship; but even when the act is purely one of a "friends-with-benefits" setup. There WILL always be a certain amount of emotions.

On Love - yes, it can be painful. But the good times will always outweigh the bad if the relationship is balanced. You tend to stick together through the bad times more so than if it was not a relationship, but you know there is light at the end of the tunnel. You know the pain is there because it will make you stronger; and ultimately pull two people closer together.
I don't think your judgement becomes too clouded - you're just prepared to invest a whole lot more, because it means a whole lot more to you. It's not as easy to emotionally discard a lover as it may be to discard a friend - for whatever reason.

But life is supposed to be shared; to be enjoyed by 2 people. Don't compromise on the experience of sharing with someone, for fear of being hurt.
Life is not a life fully lived, if you keep putting things off due to fear. Take a plunge - who knows, you might actually enjoy it.