I think the key, as with anything, is being careful. No sledding isn't perfectly safe, but most of us survive our sledding years just fine. I started sledding when I was about 2 and would still be if we had a decent hill. I think the big thing is to make sure the path, and surrounding area is clear, and that you sled with only the amount of people that can be carried by a sled. Also don't do anything stupid on sleds (don't stand, try to roll off, etc)
I did witness a pretty scary sledding accident. When I was in middle school there was an activity for each grade at the end of the month for the kids who had not been written up or received demerits during the month (discipline systems varied by grade). The school had an awesome hill out behind it, so sledding was a popular choice in the winter months. The year I was in 6th grade, one of the 7th graders got on a snow tube (meant for 1) with 3 other girls. The added weight caused the tube to flip, and the girls went flying. One landed on top of another one, and the one on the bottom of the pile was hauled off to the hospital by ambulance on a backboard in a neck brace. She ended up making a full recovery, although she did wear a neck brace for about a week after. It could have been much worse though, and would have been prevented had she obeyed the instructions that say a tube like that is only for one person.
BTW, we still had our sledding party the next week. The teachers just made sure that no one road more than one to a sled, even if the sled could hold multiple people