I have to agree with Aussie. I don't think this is really a huge issue now, but if the parents act weird about this, the children will learn that sex is weird. Then they will have a distorted image of sex.
Parents overreacting is a destructive thing.
I remember being at a Christian friends house. He and his wife were elsewhere in the house, and their little boy walks in to the kitchen, and pulls down his pants to show me his thing. I was quite shocked but I reacted calmly and told him that he shouldn't show that to everyone. I told his parents and they began freaking out. They started being suspicious that maybe he is being molested at the caregivers and the like.
Seriously, parents overdue this stuff, and while they have good intentions, their methods end up traumatizing the children rather than leading them in the way that God would have them go.
Quest