The final paragraph of the lesson manual reads:
When we obey the law of chastity, we can live without guilt or shame. Our lives and our children’s lives are blessed when we keep ourselves pure and spotless before the Lord. Children can look to our example and follow in our footsteps. (232)
Unfortunately, the lesson manual's claim that obedience to the law of chastity helps individuals to avoid guilt and shame is not corroborated by scientific research. In fact, it appears that the opposite may be true.
In January 2011, Daniel Ray and Amanda Brown of Kansas University released a study called "Sex and Secularism: What Happens When You Leave Religion" about the impact of religion on attitudes towards sex. They surveyed approximately 14,500 individuals from a wide variety of religious backgrounds. Ray and Brown found that religious people had sex just as frequently as secularists (such as atheists, agnostics and Unitarians), that they engaged in the same kinds of sexual acts (masturbation, oral sex, pornography use) and often became sexually active at the same ages. But the study found that those who self-identified as religious experienced much more guilt associated with sex acts than their non-religious counterparts. Furthermore, religious people reported feeling significantly less satisfied with their sex lives than secularists.
But what was perhaps most interesting was the finding that 8.19 out of 10 Mormons experienced high levels of guilt and shame associated with sex---higher than any other religious group included in the survey. How can we make sense of the manual's promise that those who obey the law of chastity "can live without guilt and shame" when so many Mormons apparently experience the opposite? If chastity truly were a God-given principle, wouldn't it stand to reason that it would bring the greatest peace of mind and good mental health to those who tried to follow it? What accounts for this dissonance?
Mormons sacralize sex beyond a healthy, normal level
One one level, I think the problems come from the sacralization of sex. Mormons sacralize sex more than most religions do, meaning they identify it as a sacred, holy act more than many other religious denominations. Take Jeffery R. Holland's famous BYU talk "Of Souls, Symbols and Sacraments." Holland argues that the soul is both the body and the spirit and, because Christ paid for our souls through his Atonement and death, we do not own our own bodies. Because we do not own our bodies, we do not have the right to engage in sexual acts without the Lord's express approval (signified by the covenant of marriage). Holland also argues that sexual intercourse is a symbol of the total union between a husband and a wife---and that to pretend you are unified when you really are not (e.g. you didn't get married to solidify your commitment to one another) is sinful. And finally he argues that sexual intercourse is a holy sacrament, "symbolic of a union union between mortals and deity, between otherwise ordinary and fallible humans uniting for a rare and special moment with God himself and all the powers by which he gives life in this wide universe of ours." He argues that since sex is engaging in the act of creation, which is a God-like attribute, it is a sacred act that should only be engaged in under the boundaries that God has given it (e.g. marriage).
When I was a young adult (and a TBM), I thought this talk was simply beautiful. It appealed to my intellectual side by making sex an abstract, metaphysical act that had profound symbolic meaning. Having now experienced sex for myself, I don't really see sex as a spiritual act (although I know that it can have that feeling for some). I don't really feel like God is in my bedroom with me (and I kind of prefer to keep him out of it, thank you very much). Rather, I experience sex primarily as a physical act---something that's mostly fun (recreational) and can be used to solidify the bonds between me and my partner. I personally don't regret having "saved" myself for my husband so that we could grow closer by exploring our bodies sexually together, but I also don't fetishize sex and think of it as being greater than it is. It doesn't need to be a deeply symbolic, spiritual act to be meaningful and enjoyable for me. Thinking of it as a physically-stimulating, recreational activity doesn't lessen its importance. But the fact that Holland and other church leaders have put sex on such a holy pedestal becomes very problematic for those church members who treat Holland's words as scripture.
Speaking of scripture, here's another excerpt from the Gospel Principles manual:
The prophet Alma grieved because one of his sons had broken the law of chastity. Alma said to his son Corianton, “Know ye not, my son, that these things are an abomination in the sight of the Lord; yea, most abominable above all sins save it be the shedding of innocent blood or denying the Holy Ghost?” (Alma 39:5). Unchastity is next to murder in seriousness. (230)The Book of Mormon's declaration that unchastity is nearly as serious as murder has the same function as Holland's talk: it's trying to make the act of sex seem sacred and special---it's just using negative terms rather than the positive terms that Holland prefers. Frankly, the analogy that sex is nearly as serious as murder just doesn't hold water for me. I can think of so many more sins that are much more heinous and that have much more serious, far-reaching consequences than sexual promiscuity. How about spousal or child abuse? How about kidnapping? Torture? Extortion? Armed robbery? Drunk driving? Embezzlement? Drug dealing? Sexual promiscuity just doesn't even seem to be in the same moral ballpark as any of these crimes---let alone murder.
The over-exaggeration of the seriousness of sex has caused many Mormons to develop skewed perspectives about human sexuality. For example, witness this statement from Bruce R. McConkie's Mormon Doctrine:
Loss of virtue is too great a price to pay even for the preservation of one's life---better dead clean, than alive unclean. Many is the faithful Latter-day Saint parent who has sent a son or a daughter on a mission or otherwise out into the world with the direction: "I would rather have you come back in a pine box with your virtue than return alive without it." (124)While I'll cut McConkie a little slack for being from a different generation than my own, I can't help but feel that this line of thought is very disturbing. It's really not that far off from suggesting that people who break the law of chastity should be put to death. That's kind of messed up. And although I wish this were just an isolated statement made by McConkie alone, there have been nearly identical statements by Spencer W. Kimball, David O. McKay, and Heber J. Grant. When men who call themselves prophets make these kinds of statements, they have consequences. These sentiments ripple through Mormon culture for a long time and create problematic guidelines for the way we perceive and treat people who are sexually active before marriage (which, by the way, is almost everyone---including many Mormons). That's why sacralizing the act of sex---making sex into something more serious than it actually is---has profoundly negative societal consequences.
Virginity or bust
Another quote from the manual:
Satan not only encourages us to dress immodestly, but he also encourages us to think immoral or improper thoughts. He does this with pictures, movies, stories, jokes, music, and dances that suggest immoral acts. The law of chastity requires that our thoughts as well as our actions be pure. The prophet Alma taught that when we are judged by God, “our thoughts will also condemn us; and in this awful state we shall not dare to look up to our God” (Alma 12:14). (228)
The sister who taught this lesson in Relief Society on Sunday took a very hard-line approach to chastity, arguing that even having impure thoughts is a breach of the law of chastity. She further postulated that seeing anything of an erotic nature in the media was also a breach of the law of chastity because it leads to impure thoughts. I disagree. Thinking about sex and moderate sexual exploration is a fairly normal part of maturation. Sex is prevalent in the media because it is a part of the human experience. The only way to avoid sexual thoughts is to either repress them or be asexual. The only way to avoid seeing sexual imagery in the media is to consciously live in a cultural bubble with little interaction with the outside world. For that reason, this Puritanical, all-or-nothing, black-or-white, virgin-or-whore mentality is neither healthy nor realistic. 
One of the problems with the church's all-or-nothing approach to discussing chastity is that it begins with the assumption that those who are listening to their message have never experimented with sex before. Because the church fosters this all-or-nothing approach to human sexuality, it can be quite harmful to those who have experimented with sex prior to marriage. As I said before, it's fairly normal to think about sex and to experiment a little bit with sex. (I personally REALLY wish that teenagers would not experiment with full intercourse, but it does seem to happen regularly.) When those who have experimented with sex hear these all-or-nothing messages, it can cause them to experience the intense feelings of guilt and shame that the Kansas University researchers discovered. It can lead to feelings of worthlessness, of being dirty, of being broken, of being "used goods," of being a second-class citizen, etc. In other words, it can lead to a profound lack of self-esteem and depression. Although the church puts a band-aid on the problem by saying that repentance is possible, we all know that the religious concept of virginity is that it is something that you can never get back. This causes individuals to feel guilt and shame over things that are in the past and which are therefore beyond their personal control. Sounds like a good recipe for poor mental health to me.
The implications for LDS female sexuality
I recently listened to the audio book of How We Decide by Jonathan Lehrer. Lehrer discussed neurological evidence that shows human beings have what is called a "negativity bias." This means that humans perceive and remember negative experiences much more strongly than they remember positive experiences. A negative experience has to be counterbalanced with several more positive experiences in order for the negative associations to be undone. (This is why it takes 5 positive comments to undo a cutting remark made by a spouse, for example.)
In the context of sex, I think that this means that negative associations with sex are going to be much more powerful than positive ones. While it's true that most church leaders who give talks about chastity offer some lip service to the positive aspects of sex within the bonds or marriage, it's usually promptly followed up by lengthy, strongly-worded messages about the negative aspects of sex outside of marriage. Because of the human brain's negativity bias, it's very difficult for church members not to internalize the message that sex is wrong, bad, evil, dirty and immoral.
LDS females are the ones who are most negatively affected by this negative rhetoric. Generally speaking, the act of sex for most females has a much stronger psychological component than it does for males. The process of getting in the mood for sex and feeling aroused is a much more complex process for a female, as humorously parodied in this picture:
When females internalize the negative stigmas about sex that are promoted by the church, it makes it much more difficult for them to achieve the psychological state that is needed in order to have an enjoyable sexual experience. This phenomena has been documented by Dr. Jennifer Finlayson-Fife who did an in-depth qualitative study of several LDS women for her dissertation in psychotherapy. Finlayson-Fife found that many LDS women had a difficult time enjoying the experience of sex after having actively repressed their sexual feelings until marriage. They began to see sex as a marital duty rather than something that was personally fulfilling. As sex became a "chore" for them, it created a vicious cycle in which it was more difficult for them to desire and enjoy intercourse. This puts significant strain on their husbands in turn because it caused them to feel inadequate or undesireable. When there are problems in the bedroom, it causes a great deal of stress within a marriage. 
Pornography and masturbation could actually be good for you?
Again from the manual:
President Gordon B. Hinckley warned: “You live in a world of terrible temptations. Pornography, with its sleazy filth, sweeps over the earth like a horrible, engulfing tide. It is poison. Do not watch it or read it. It will destroy you if you do. It will take from you your self-respect. It will rob you of a sense of the beauties of life. It will tear you down and pull you into a slough of evil thoughts and possibly of evil actions. Stay away from it. Shun it as you would a foul disease, for it is just as deadly. Be virtuous in thought and in deed. God has planted in you, for a purpose, a divine urge which may be easily subverted to evil and destructive ends. When you are young, do not get involved in steady dating. When you reach an age where you think of marriage, then is the time to become so involved. But you boys who are in high school don’t need this, and neither do the girls” (in Conference Report, Oct. 1997, 71–72; or Ensign, Nov. 1997, 51).
I think it was probably under the Hinckley administration that the church ramped up its rhetoric against pornography and masturbation. This may have actually had the opposite effect that the church wanted it to have. A recent study released from Harvard found that Utah ranked the highest in online porn subscriptions compared to other states. This trend can probably be explained by some of the research that has been coming out of Utah State University recently. These researchers are finding that unhealthy use of pornography (which is defined as pornography use that interferes with healthy relationships, one's finances, or one's work responsibilities) is linked to the spectrum of obsessive-compulsive disorders. What this means is that when someone works really hard to suppress the desire to look at pornography, it actually leads to an increase in neurotic pornography abuse. Although it's very counter-intuitive, the way to stop the cycle of compulsion is to give into the desire and not obsess over it so much---to avoid imbuing it with intense negative emotions such as guilt and shame. Then it becomes much easier to stop engaging in the unhealthy behavior. That's exactly why the church's all-or-nothing, highly negative approach to pornography doesn't work: it actually causes the very behavior that it's meant to prevent.
The reality is that masturbation (which is usually closely linked to pornography use) is good for your mental and physical health. For men, masturbation promotes good prostrate health, oxygenates the body, and helps relieve stress. The myth that masturbation causes homosexuality (which used to be one of the widely-accepted theories about its causes) has been thoroughly debunked by peer-reviewed psychological research over the last two decades. For women, masturbation can help balance their hormones and assist with self-discovery about their bodies' erogenous zones (which leads to more effective partnered sex). Masturbation can actually be a healthy alternative to promiscuous sex because there is a 0% risk of contracting a sexually-transmitted disease or having an unwanted pregnancy.
Although I am strongly opposed to the porn industry's exploitation of women and their portayal as sex objects, there is some evidence that moderate pornography use can be beneficial as well. It's counter-intuitive, but some researchers have also found that pornography use actually decreases the risk of engaging in violent sexual acts against women. I think moderate use of erotica is probably acceptable.
In short, the church's stance on human sexuality is unrealistic and is not founded on factual evidence. I don't really know how the church could realistically update its stance on sexuality to be more progressive. Since what is appropriate and useful for one person is highly individualistic, human sexuality defies the black-and-white, rule-based system of morality that is favored by the church. I honestly can't see a way for the church to resolve these issues without becoming a completely different organization. But I do feel that the church's current stance on human sexuality is not sustainable for the future; many youth of the upcoming generations will likely become disillusioned with the institutional church as they begin to see for themselves that the emperor has no clothes.
 I think some of these societal attitudes may actually be the vestige of a pre-birth control society---when the act of sex had much more serious social consequences such as STDs and unintended pregnancy.
 Mormon Expression also had a great 2-part podcast episode about LDS Female Sexuality if you want to study this topic in more depth.