Oh my gosh am I ranting again?

Here this issue has come up over and over again. The issue in question is to only fellowship with other Christians or to also fellowship with non-Christians...Or for that matter Christians whose beliefs may not still be just in line with yours. I know I've covered this a little when I did the "Where do I "fit in"? thread. However, This week in Sunday School class this thought got into my head again. I didn't mention it out loud at the time but it was all I could think about the whole class time. Now I wish I did bring it up so I could have gotten some of my class mates opinions on it. The verse we were covering was where Jesus said that people would know us by the way we loved each other. In my mind I was asking "The way we love one another as in all humans or just other Christians exactly like us!?" I mean...How can we love all humans if we are busy avoiding them so their sin doesn't contaminate us? And let's just say for a moment He meant by the way we love each other meaning our fellow believers...All I can say is, you know what? People are seeing how we love each other and they are running for the hills!! Please don't read don't discern wrong from right in that comment. My friends and family members do things wrong and they know that both

A. I felt that they were wrong
and
B. I still love them.

I do have different values from mainstream public. I do understand we are to be in the world but not of the world. But IMHO too many Christians are choosing to not be IN the world either. Too many homeschoolers in an effort to protect their families from the world are not shining their God given light on the world! How can people see how kind, loving and filled with peace you are if you are avoiding them like the plague?

Let me just clarify. I keep my kids out of PS because I don't want someone else to have more time to influence my kids than I do. BUT I don't lock them away from the world as a whole. I have faith that being with me all day long, 7 days a week, 365 days a year has taught them our beliefs strongly enough that they can hold their own. As a result of my philosophy do my kids some times get exposed to things that I'd rather they hadn't? Well, I'm not going to lie about it. Yes, they do. But we talk about it and move on.

So I pose a question to you dear blog reader:
How righteous is too righteous? Is there such a thing? We are called to be Holy and set apart but how far apart? How are we to fellowship with "the world" with out becoming jaded by it? I understand the idea of not being of "the world", but if we don't fellowship with "the world" at all...how are we to ever reach them?