Well... I don't know about teaching them about SEX at 4, but probably teaching them where babies come from is fine. I started asking my mom about where babies come from at this age (because all my friends were getting baby brothers and sisters) and she gave me the straight dope. She gave me "A Child is Born," by Lennart Nilsson, which is an older book of in-the-womb photographs that go through trimester by trimester. I still remember how cool I thought it was, enough that I went off to Montessori and told all the other little kids where babies came from (oops, sorry mom!!) My teachers eventually told my mom I was holding "sex education" classes, but no one seemed to mind. Still, you might want to think about whether your four year old is capable of not talking about something. I, alas, was not, and embarrassed my poor mom. BUT, I am now working on a graduate degree in biology, so maybe that's where it came from...
As for the actual sex part, I don't think she's going to understand at four. I really think this stuff is best saved for puberty, when they're more likely to have some understanding of physical feelings. I know you want to head things off at the pass, so to speak, but I think you'll freak them out if you try to talk to them about this stuff when they're not ready. Maybe focus on having a good open relationship with them and hope they'll ask you about these things in the future. I don't remember hearing anything about sex until about 4th grade, but that was a long time ago... I'd say if you get that far without her asking on her own, it's time for the sit down.
Hope this is somewhat helpful.