I think Famine put forward some great points in his post.
To me, if a child has reached the point where they discover sex or drugs (or rock 'n' roll), etc. and they haven't already been educated about it to an appropriate level, they have been failed somewhere by the adults in their life. We make a big deal about teen pregnancy and alcoholism, etc., yet what can we expect when we near-enough leave them to learn by trial and error?
We need to forget the taboo - if a child asks about sex, why would you hesitate to reward their inquisitiveness? It is that same inquisitiveness that will lead them to make good life decisions and become a valuable member of society. After all, isn't that the aim of parenthood in the first place?