I’ve been to one. Am I the first one to answer who has?
The one I attended was actually facilitated by the founders, Reid and Marcia, who I have gotten to know personally. (They started cuddle parties in NYC, so it’s not out of the midwest.)
My experience at the cuddle party was that it was as much a communication workshop as an opportunity to cuddle. We spent literally more than an hour before the cuddling began: hearing the guidelines, icebreaking, doing exercises where we practiced making requests, practiced saying no, etc.
When we got to the open cuddling time, the groundrules were so clear that cuddling with strangers wasn’t nearly so awkward. Yeah, it was a little awkward. But it was nice. I’m sure for some people it was more arousing, but I wasn’t really interested in cuddling that intensely. If I remember the guidelines right, arousal was totally ok – it is a natural phenomenon, after all – but dry humping was not. They have facilitators there who watch for that to make sure the space is kept safe. And of course, at any time, anyone could say no or back off.
By the way, the people who came to the cuddle party were sane, mature people. Not needy losers. I ended up having some really great conversations that afternoon. A bunch of folks were just kind of sprawled out on a bed, guys and girls, relaxed. It was fun. I’d do it again. Great conversations. I made a friend I’ve stayed in touch with. Here’s their website if you want to read more. They have a great FAQ which responds to the sex/arousal/weirdness stuff. If you’re not totally weirded out by it, and you want some more touch in your life, I’d recommend it.