I think you have received many great responses. I just want to throw another perspective in the pot.
Deal with it now, honestly and openly because before long you will be getting pointed questions from your child that will be much harder to answer.
My DD is in second grade and 8yrs old. She came home yesterday telling us how one of her little classmates said that she and her boyfriend had sex. My DD knew enough to say, "that isn't possible" and then talked with us(her dad & I) and we talked that if it were true that would be "bad touch" (the current school program) and that it would be physically and emotionally damaging for a child that young to have sex. We have talked with my DD and her little brother completely openly & honestly and sex, babies, vaginas, periods, and penises and testicles. She has a comfortable knowledge but was still confused when her classmate said this. Thankfully she spoke to us rather than trying to find answers on the school yard.
I am pretty progressive BUT I found it shocking that little second graders are talking about sex, and boyfriends, and girlfriends, etc. I didn't believe it when others told me it was getting younger and younger that these topics were entering the social scene but here is proof. And this isn't the first classmate discussion she has shared with us; talks of a boy classmate having 100 girlfriends and being a "chick magnet" and "playing the field"., a classmate saying that he "always cheats on his girlfriends" that's why he has so many, I mean for goodness sake, these are 7-8 yr olds. This talk didn't enter my conscience as a child until 12-13.
So please be honest now so your child isn't given incorrect or misdirected information that could open up a world of confusion or hurt later as he gets older. You don't have to pull out the Karma Sutra, just be as honest as you are comfortable even telling him that it makes you uncomfortable because...
Regards,
ann m.