Do you want the entire male body, penis and all, taken away or just the body but leave the penis?
I'd vote for the latter.
I guess ideally it'd be cool to have some kind of 1st person/POV perspective, but this sounds like a good interim choice for those of us who want the option.
Bonetown had a similar issue (w/ the main character's body getting in the way), especially since the character gets bigger as you advance through the game, get better stats, etc. (Fun game though.)
P.S.: @xGx: How did you get the tiny dude result, anyway? That sounds hilarious, might have to try that. I have done simple tweaking on female xml files, did the tutorial which resulted in the "Custom 1" character and all that, but haven't done anything with the male characters yet.