Your daughter is definitely not too young to have the talk -- I learned the facts of life from a friend of mine back at that age. Then my mother gave me a book called, "Susie's Babies," a book about a gerbil having a baby -- not a book I would recommend. :-)
With my daughters it has been very helpful to present the facts of life from a biblical viewpoint. It wasn't very difficult to talk about how God created a man's and woman's bodies to fit together perfectly and then explain that's how God planned it in order to create children. It put it in a much more objective view, as opposed to personal -- which IS embarrassing.
Your daughter will ask questions about you and her dad, so be prepared. Decide now how much you will tell her and when you will let her know that there is certain information that is private between you and your husband. (i.e. "How often do you and Dad make love?" -- real question from my older daughter!) There are also times you might have to tell her she would have to ask her father if it's something to do with him. (Just warn him what questions may be coming up. However, I don't think my girls have ever asked their dad any of the questions. :-)
There have been a lot of good books recommended already. The only thing I would recommend is "Passport 2 Purity." You take your daughter (or the dad takes the son, if others are reading this) on a weekend retreat. Here's the product description: "Here's everything you need to plan an interactive, life-changing weekend retreat with your preteen! Dennis and Barbara Rainey help you confidently discuss the physical changes ahead; establish principles on dating and sex; and equip your child to make biblical choices throughout the turbulent adolescent years. Includes 57-page student and parent manuals, five audio CDs, and a commitment passport." "Passport 2 Purity" costs $24.99 at www.christianbook.com
Good luck. I know this is an "interesting" time in your life. :-)
J. C.