I have always been an explainer.
I seldom can just let things go, and like to fill empty quiet space with chatter.
So when my children ask their bazillion questions everyday I try to give legitimate answers to most of them. I try to talk to them like little adults, and not underestimate what they are capable of understanding.
This doesn't always turn out, however, because although I am preeeety sure my kids are smart, I am also pretty sure they aren't geniuses either.
I don't know if sometimes I am talking above their heads, and I am not sure what they really get out of some explanations.
One day I somehow got suckered into explaining how babies were made. I decided to take a scientific approach and told my (then) 2 and 4 year old that babies were made from a cell from each parent. Details included naming sperm and eggs as the cells and telling how they joined together and made a baby in the mother's uterus, which was underneath her tummy.
From this, my son took away that I layed eggs like a chicken, and when he was a baby he lived in my butt. (Hey, butts are underneath stomachs I guess.)
And btw, If your 3 year old kid come home from playing with my 3 year old and know that babies come from sperm and eggs, you are welcome. :P