There are all kinds of kinky things going on in Orthodox bedrooms (see Calm Kallahs and the Frumsex messageboards for proof) but no one is having sex through a hole in the sheet. 
This rumor seems to have come from people looking at Orthodox Jews and their hardcore commitment to modesty and assuming that even during sex they’d insist on keeping everything covered up. But in fact, according to halacha you’re not allowed to have sex wearing any clothes at all, or anything that serves as a barrier between you and your partner (condoms are out). Specifically, the hole-in-the-sheet things may have come from people seeing Jews in religious neighborhoods hanging their “talitot katan” out to dry. This poncho-like garment is about two feet by four feet, has a fringe on each corner, and a hole in the center for the wearer’s head, and it looks somewhat like a small sheet with a hole. So, if you have a dirty mind, you might look at it and assume it’s some kind of uber-modest lingerie. But it’s not. Actually, the rabbis have a pretty laissez fair attitude about what we do in bed, with the basic rule being that ejaculation has to happen inside the vagina (though some rabbis are even lenient about that). Check out Snopes, and WorldNetDaily for more on this myth.
Previously: Blood Libel
currency trading is a bit tricky compared to internet marketing but you could earn a lot from it`
Thank you for making the sincere try to explain this. I think very robust about it and wish to be told more. If it’s OK, as you reach extra extensive wisdom, could you mind adding more posts similar to this one with additional info? It would be extremely helpful and helpful for me and my colleagues.