I have a friend that is VERY specific about the children she allows her kids to "hang" out with. I allowed my children to pick their own friends, but did point out the better qualities in the friends that I was glad they were spending time with. When there was someone I didn't like, I would be more likely to ask my child what they did like about this person. I secretly was hoping I had overlooked something. Overall it worked out well...they are adults and made it through the teen years relatively well! What was/is your method??