After reading this thread I had a look at Google Maps to see what area you're all talking about. I'm not from Toronto as you might guess, infact I'm not from Canada. I live in Cambridge, UK.
When I was over in Toronto last May, I was staying on Carlton St. One night I decided to take a stroll around the city - it was about 2am, and I didn't really know where I was going. I took a left out of the hotel, further down Carlton St, and then went into Allan Gardens and had a sit down on a bench. Is this a bad area? I did see a fair few hookers in my stroll, and a couple of homeless guys, but I stopped for a chat with some of them (the homeless guys, not the hookers, I just politely declined their offers of "company") and they seemed alright! (I think my English accent gave us something to chat about.)
On my 2am stroll, I continued down Jarvis St, onto Queen St East, and back round to Yonge, and didn't have any trouble. The area didn't look particularly run-down (im comparison with some of the shit-heaps we have over in England!!) Is this area really, really bad? I don't want to jump to any hasty conclusions but it seems that if there's a couple of bad incidents in Toronto, the whole area surrounding the incident is tarnished with the same brush! Over here in London, we have daily shootings and stabbings - does anyone think that because Canada is (stereotypically) quite a peaceful country, with not a great trouble, that when there is trouble, more of a fuss is made about it?