The Spitzer matter reminded me of this factoid, and a How Appealing item pointed me to a news story that explains it:

"A lot of people don't realize that prostitution is legal in Rhode Island if you do it indoors," State Police Inspector Stephen Bannon testified. In an accompanying letter, State Police Supt. Col. Brendan P. Doherty noted that under current law, "persons are free to solicit sex for money in newspapers and/or over the Internet as long as the conduct that is agreed upon takes place in private."

The Rhode Island legislature is now considering "clos[ing] the loophole," but I'm not sure it's quite a "loophole": The relevant statutes prohibit operating a bordello, pimping, or loitering with the purpose of prostitution, but they simply don't prohibit prostitution itself.