In Ireland RSE -Relationship & Sexual Eduxation starts at 4. Its not grafic by any means at that age but in class we teach the children to wash a baby- a doll or if possible a real baby. starting at the toes and working towards the head. This way the child hears all the anatomically correct terminology for every body part including the penis and the vagina. In this way it doesn't make a big deal out of learning these words. It is not necessary at this age and stage to teach them particular parts of these private areas but as previously mentioned when it comes to sex abuse and children are interviewed it is clearer to record the childrens discussion- there is no speculation!
Also as previously discussed it is not the children that are embarassed about these terms its us adults who did not grow up in society were it was acceptable to even mention. I think it great to be in a posiition to teach them penis and vagina and if they shout it out in the supermarket well at least its something to share in the forum!