J.W.
I agree with you. Now, I'm hardly the poster mom for spic-and-span living, but dog poo? That's just gross.
That's the tricky part about off-the-books childcare arrangements: communicating expectations without jeopardizing the laid-back relationship. If the horse weren't already out of the barn on this one, I'd suggest setting ground rules before agreeing to watch the kiddos. It's not too late to communicate a few friendly, common-sense rules about hygiene and anything else involving what the children can catch from each other. The parents shouldn't take offense if you couch it in a practical way -- "I never thought about it before but now that there's so many kiddos in the house I'm thinking I need to tighten up on universal precautions. Nothing personal - I'm doing it with my children, too" -- rather than critically telling her what she needs to be doing (although I don't blame you for wanting to, it will definitely put the parents on the defense). Good luck!