It's always weird to have to explain about reproduction to a small child but every parent will definitely get asked this question: "How are babies born?" or "Where do I come from?". I guess depending on the age, we have different ways to answer this question. I remember when my son was 4 years old and he asked me this, I basically just said that his mommy and daddy loved each other so much that they prayed to God to give them a baby and God answered their prayers.... Unfortunately, a year later, when my son was asking for a little brother or sister, he started praying to God and it didn't quite work out for him :)
Since then, we've sort of had the talk, through a book I've had since I was little called "Where Do I Come From?"... It does help to have some sort of visualization when you talk about this...
Anyway, here's a funny talk I found amongst the great TED Talks about a mother explaining reproduction to her 8 year-old daughter: