Hi Charity, as horrible as this is to us who know the magnitude of this is, I think the best thing to do is to first realise that your son is very innocent and does not understand how wrong this was so calmly but firmly explain that this thing is very inapropriate and something that is not at all for children, but reserved only for married adults.It is important that he doesn't feel condemned and is confident that he is forgiven but at the same time convicted that this thing is very wrong. This conviction by being firmly rebuked followed by assurence that he is forgiven and that the matter is resolved will save him a lot of shame and unresolved guilt later.From then on make sure that the matter is held in confidence, ie; be prepared to reasure him that although it was wrong it is forgiven dealt with, and that the matter is not widely known( DO NOT go talking about it openly to everyone, especially if he is around). As for your young daughter,try very hard to get some advice( once again being sensitive not to make a big public fuss for the sake of your son) from a wise christian counciller or child psycologist on the best way to resolve the trauma and confusion that she has endured from the ordeal.Neither of your Kids should come away from this feeling guilty or unclean although it was wrong because "if we confess our sins he is faithfull and just to forgive us and cleanse us from all unrighteousness".
This sort of thing is something that we all need to be careful of and is not your fault so don't feel guilty or condemned yourself, with Jesus help this thing can be completely healed and sorted, and need not be something that affects your lives indefinitely, i recommend the website 'Focus on the Family' with James Dobson for advice on things like this.