There are plenty of movies that can be watched as a family. You may consider it a bummer to have to pick from among them, but, say, Austin Powers was not intended to be a family movie. If you want to watch it as a family, wait until your kids are old enough to get it--at which point, of course, they probably won't want to watch it with you. I speak from experience, here--watching movies wherein the main jokes are about sex with your parents is just creepy.
However, taking out the bits you don't like is not, to me, okay. It reeks of censorship, for example the bowdlerization of Shakespeare. Yes, there are dirty bits in Shakespeare's plays. Many of them are integral to the plot or character development. That was his creative choice 400 years ago, and I don't feel you have the right to take that away from him. I'm not terribly happy about editing for time, though I don't find it actively offensive.
If you want to watch stuff with your kids, try Sesame Street. Try enormous amounts of the movies of the Walt Disney Company, especially those made when Walt was still alive. Ratings exist for a reason, you know. (The horrible women with the half-dozen children under eight in the theatre when I went to see Austin Powers, I'm looking at you.)
"Now everyone was giving her that kind of look UFOlogists get when they suddenly say, 'Hey, if you shade your eyes you can see it is just a flock of geese after all.'"
"You can't erase icing."
"I can't believe it doesn't work! I found it on the internet, man!"