We put up netting to try and keep the toys on board. Didn't work - there are a couple of Teletubbies sleeping with the fishes at the bottom of Puget Sound. I'm putting new lifelines on, and won't be putting the netting back up.
Our rules for the kid (now 4, sailing since he was 2 months) are PFD when we're at the dock, and PFD+Harness under way (if he's above decks). It's great peace of mind.
I agree with Sailingdog - get a tether he's not going to accidentally open. Our son hasn't had any problem tripping on the front tether. I think they get used to it and learn how to cope.