Should America regulate manned commercial spaceflight?

In late December 2012, the world could change dramatically. No, not that.

Congress passed a law in 2004 saying essentially that the FAA, which regulates commercial space launches, should not put any regulations in place to address the safety of crew or spaceflight participants. (They're not called passengers, because the government doesn't want to imply the level of safety you could expect from a commercial airplane.) Part of the intent of that law was to let the industry develop on its own.

On December 23rd, 2012, that provision is set to expire.

To date, there has been one private manned launch vehicle, SpaceShipOne, and it flew into suborbital space three times, carrying only a pilot on each flight; it is now retired. SpaceShipTwo is planned to begin flight tests in 2010, and enter commercial service with Virgin Galactic in 2011. I am not aware of any other commercial manned vehicles planned to enter service before the law expires.

So, should the FAA begin regulating commercial manned spaceflight? If so, to what extent? And if you were flying to space, how safe would you expect to be?