Update: Northwestern University President Morton Schapiro said Thursday that he was "troubled and disappointed" after hearing about the sex toy incident—and that Northwestern would be launching an investigation into it. “I feel it represented extremely poor judgment on the part of our faculty member,” he said in a statement. On Saturday morning, the professor behind the controversial class issued his own apology stating that he regrets allowing the controversial demonstration, and that "In the 18 years I have taught this course, nothing like the demonstration at issue has occurred, and I will allow nothing like it to happen again."

It was bizarre, say students—even for a professor who gets off (excuse the pun) on controversy. On Feb. 21, after a lecture on sexual arousal, students in Northwestern University psychology Professor J. Michael Bailey’s human-sexuality course were given the option to stay for a guest presentation. Most were used to these sessions: With topics like “The Gay Guys Panel” ( gay men talking about their sex lives) and Q&A sessions with transgender performers, the optional add-ons were part of what made Bailey’s class one of the most popular on campus.

But this particular lecture was, shall we say, different. Led by a man whose website describes him as a “psychic detective and ghost hunter,” it was called “Networking for Kinky People,” and began with a towel placed neatly on the auditorium stage. Next, a woman took her clothes off, and—with an audience of around 100—lay down on her back, legs spread. As students moved forward from the theater’s back seats, for a closer view, “The girl grabbed the mic,” says Sean Lavery, a Northwestern freshman. “She explained that she had a fetish for being watched by large crowds while having an orgasm.”

No, the girl involved was not a student. Yes, she was over 21, we’re told—and the guy stimulating her was introduced as her boyfriend. “It was a committed couple who did the demonstration, and it happened at the end of the class,” says Ken Melvoin-Berg, the guest speaker, who helps operate a tour company called Weird Chicago that offers sex tours.

We'll spare you the gory details—but let's just say they involved the woman's boyfriend bringing her to climax on stage, using a contraption called a "fucksaw," and plenty of gasps, not just from flabbergasted students. “I was gauging everyone’s reaction,” says Lavery, who’s been in Bailey’s class since January. “I think everyone was just like, ‘Is she really doing this right now?’”

The demonstration will become a rallying cry for sex-education critics, and parents of fresh-faced 18 year olds for whom Northwestern is suddenly at the top of their college wish lists.

The demonstration, as you can imagine, has become the talk of campus—a story that will undoubtedly become fable for subsequent classes of incoming freshmen. It will also certainly become a rallying cry for sex-education critics, and parents of fresh-faced 18 year olds for whom Northwestern is suddenly at the top of their college wish lists. With the story first reported in Northwestern’s campus paper, The Daily, on Tuesday, it’s safe to say that the influx of criticism has only just begun.

But Bailey, for his part, has never shied away from controversy. His 2003 book, The Man Who Would Be Queen, ruffled feathers with its argument that some transgender men who wish to become women are driven by erotic fascination rather than biological desire; Bailey has said himself that he enjoys turning intellectual taboo on its head. But he resigned from his post as the chairman of Northwestern’s psychology department in 2004, shortly after allegations that he had unethically published confidential information about many of his subjects. (The claims were never substantiated, and Bailey has vehemently denied them.) Now a professor of clinical and personality psychology, Bailey is not licensed as a clinical psychologist in Illinois, nor has he been, according to the Illinois Department of Professional Regulation.

Back on campus, Northwestern is still defending its longtime prof, despite Bailey's comments in another class, quoted in the student newspaper this week, that "Sticks and stones may break your bones, but watching naked people on stage doing pleasurable things will never hurt you." "Northwestern University faculty members engage in teaching and research on a wide variety of topics, some of them controversial and at the leading edge of their respective disciplines," the university's vice president for university relations, Alan Cubbage, told The Daily Beast in a statement. "The university supports the efforts of its faculty to further the advancement of knowledge."

Bailey declined to be interviewed for this article, but seems to have gained at least a bit of perspective since his earlier remarks. Late Wednesday, he posted a lengthy explanation of his behavior to the Northwestern faculty site, in which he acknowledges he had "some apprehension" about the display—though more for the personal repercussions than any lack of educational value. "Do I have any regrets? It's mostly too early to say," he writes. "I certainly have no regrets concerning Northwestern students, who have demonstrated that they are open-minded grownups rather than fragile children." Grownups, yes; but also open-minded enough to assess the display for themselves. "I was like, 'OK, she orgasmed on stage,'" says Lavery, the freshman, who is 18. "What're we supposed to take away from that?"

Jessica Bennett is a Newsweek senior writer covering society, youth culture and gender. Her special reports, multimedia packages and original Web video have been honored by the New York Press Club, the Newswomen's Club of New York and GLAAD, among other organizations. Follow her on Twitter.