we used It's not the Stork. It actually comes in 3 age level groups. I thought it was neccessary to prepare DD for the upcoming birth of her sister.
I don't think you need to say the actual mechanics. I think at this age, you can sort of "leave a blanket over it" so to speak and give him the "special hug" line...but I also think it's important to not hide the truth from them or act like its a mystery, because these are EXACTLY the kinds of kids that want to solve a mystery. I think you need to give them proper, appropriate vocabulary (we use the correct names for all parts, except breasts, we use bosoms). My girls do say penis and vagina and know that women have three holes. We also stress that these are things to talk about in the bathroom or at home or the doctor's office.
So far, so good!
