I've been seeing my boyfriend about 2 months and because we knew each other beforehand (and work together) it seemed a good idea to establish what was going on with us fairly early on. We'd been sleeping together about 2 weeks when we had the 'where is this going?' conversation. Awkward and you do risk putting your heart on the line and getting it squashed but I think it's a good idea.
As for seeing other people, I wasn't seeing anyone else but I think he maybe was and if so it stopped as soon as we made it official, but even before that I made sure he had no time for any other girls ;)