it really depends on where the kids are being raised..
i worked it in a preschool once..and ,et me tell u kids these days are very sharp and smart..there was this other girl workig with me and she was pregnant..all the kids knew why she had a bump..and what was going to happen..and most of the kids were under 5...so i dont think therez any point of 'lying' to the kids abt where they come from cuz they already knwo and they might call u a fool for answering them like tht..
and abt ur second question when is the right time to talk abt sex..? then well my parents never really talked to me abt it..its not right to talk abt sex in most pakistani muslims families..i just kinda learned all abt it through out my school life..
whatever you do....dont even lie to your child. There are many ways of explaining things to a child in an age appropriate way.
For instance, my 4 year old niece has this book called "a surprise in mommy's tummy" and in it it mentions how Allah puts love between your parents heart and they show each other that love in a special way. Then it goes on and talks about how Allah put a baby in mommy's tummy. Quite cute actually :)
By ten, if not eight, you should explain to your kids about sex. It's talked about outside of home a lot by that age. In the West, many schools have sex ed classes for students from 10-12. As awkward as it may be, they'll need their parents' information and opinions as well.
I don't think you should lie to your kids. But the details of the answer would vary.