@Unit, I'd suggest reading
And They Were Not Ashamed. It's a very tactful book written by Mormons for Mormons about sex. They go through all the basics, what to expect, etc. Where you're not engaged, you may be a little uncomfortable reading it now (though I'm willing to bet that you'll be uncomfortable reading it when you're engaged, too) but if you really are curious, it's a very well-written book on the subject that handles the topic with all the sacredness it deserves.
@Sky Bones, the last last paragraph that's really more of a sentence? Or the last full paragraph about the male horse? On a side note about that paragraph, I called my mom the other day after being out with my father-in-law's horses and said, "Mom! Guess what I did today?! I pet a male horse,
and I'm pregnant!!!!" We both got a good laugh out of that one.
@Defy, I'm gonna go with most of the answers above and say there is no "right" age. And I agree with Imogen that there doesn't have to be one big talk. I plan on teaching my children age-appropriate things as they grow. I want them to always feel comfortable asking questions when they think of them. I'd much rather them ask me awkward questions than asking their friends or patching together things off TV. If I never make the topic awkward, and if it's never a topic I walk on eggshells around, then it will simply never be awkward. You can start early by teaching your kids the proper names for body parts and not being ashamed of them yourselves. When you teach them their toes and their nose, you don't have to ignore the private parts. You also don't have to make a big deal out of them. Maybe you don't to teach them those parts right away and that's fine. But when you're potty training, you've got a perfect opportunity to teach kids proper terminology and that they are sacred and special parts. Just like we don't show them in public, we don't talk about them in public. That's also a great time to teach them that they should never let anyone else touch those parts and if someone does, please come tell Mommy or Daddy. Little things like that make for prime teaching moments. Things that are natural and come up anyway. Don't make a big deal out of them or a special occasion. Just… use everyday moments to teach a little bit at a time.
Or when a 5-year old asks where babies come from you could say something like, "When a mom and a dad fall in love and get married, Heavenly Father gives them a special gift of a baby. The baby grows from a really tiny speck to a full baby inside mommy's body." And you can focus on the development of the baby in mommy's tummy. When that child turns 6 or 7 and thinks about it more and asks, "But Mom, how does the baby get inside your belly?" You can still keep it simple by saying that all mommies have a bunch of eggs inside of them and all daddies have sperm inside of them. When they are ready to have a baby, the daddy can give the mommy some of his sperm and when the sperm and eggs meet, they make a baby. Just like when you mix flour and eggs and sugar and milk, they make a cake." Then focus on how two things combining can make something completely different. You can always focus the conversation on what you want the focus to be on. If you're not comfortable talking to your 7-year old about the actual act of sex, then focus on a different part of reproduction. And always, always, make it age-appropriate.
If you have little conversations like that consistently, you never have to have a big "talk"
and it makes the topic less awkward in your home, so when your kids have questions, they're comfortable enough to ask.