Wow, I just came in to my office after leaving my question on Thursday to find that it provoked a really lively discussion. Guard, thanks for the links, and thank you everyone for your thoughts. I think that what emerges from the discussion is that this is a sensitive issue and really depends on the environment, the type of kid etc. I also think that your decision will be affected by the type of person that you are (Do you let things lie or are you headstrong and do you take risks or are you conservative) and the relationship that you have with your kids.
Firstly, I would like to share a joke which I think brings out a point very strongly.
A boy from a very sheltered background goes out on the street on his eighteenth birthday for the first time. On this first trip he encounters a woman. “Taate, Taate” he asks “what is that?” His father replies “a Kaatchke (a duck in Yiddish)" to which the boy replies “Taate, buy me two.”
The point being that the feelings a boy has, whether towards women or physically, or both etc are natural and cannot be suppressed and therefore does not make sense to be ignored.
While I have not developed a concrete attitude yet, I do believe that
a) If we are genuine and emesdik, generally HaShem will not let us go wrong
b) If we have a good relationship with our kids in other areas, then our kids will respect us in these areas as well
c) The most important aspect is to make the child feel that you are open to discussion and sensitive on these subjects and that they are not “no-no”issues
d) Whatever the discussion is and however “far” it goes, face the issue head on and do not beat round the bush. Children sense when you are hiding things.
I know that many of these points have been mentioned but I thought that I would throw in my two cents from my perspective.
PG unless I have a definite reason not to, I plan to inform my children somehow. I daaven to HaShem for guidance and that I should do it LeSheim Shomayim.