Thank you for all the advice. I should have just posted on here to start with, but I didn't want to derail the thread with a totally unrelated topic.
Wise words as ever venus, thanks. That's the thing isn't it - these images are everywhere now, of sex, violence, war, cruelty. With the advent of the internet, 24 hr news channels, ubiquitous media images, it just seems so much more full on and unavoidable than a few decades ago. We seem to have become desensitized to seeing it, hearing about it etc. I want DD to have a few years yet before she realises what a sad and cruel place the world can be, and the full range of horrors that humans choose to inflict upon one another. 
I feel like the pressures on children snd young people today are immense, and I'd like to protect her from it for a bit longer if I can. That makes it sound as though I wrap her in cotton wool but I really don't - I'm very open and honest with her about things and I never sugar-coat it if she asks me something. My parents think I tell her too much, especially my DstepF who doesn't think sex education should be done at all yet! 
But to me it's natural to tell her how her body works and always has been.
Anyway I had the talk with her. She's still so innocent, bless her - she could relate to me all the biology of conception and has absorbed that sex means when the man puts his penis inside the woman to deliver the sperm to the egg, but couldn't think of any earthly reason why people would want to have sex if they didn't want to make a baby! We established that people have sex when they want to feel very close and intimate with the person that they love, and that that is the case with heterosexual and homosexual relationships, which led to a discussion about how gay couples have children when,as DD sagely pointed out 'they're missing some of the equipment'. I explained about various options for that and she said 'if the ladies' friend gives them his sperm, does he have to put it in a jar? How would he get it in?' I told her that the sperm all comes out at once and she said 'like starlings'. 
turns out she was thinking of the little sperm all swimming up to the fallopian tubes like a flock of starlings weaving and diving through the sky at sunset. Much more romantic a notion than the reality.
We had a long rambling talk/biology lesson that ranged from the changes to the body at puberty (she found it great fun drawing body hair and features onto some pictures) through periods and why we bleed, through evolutionary stuff (periods are really inconvenient, why wasn't this a problem for cave women?) and our innate animal urge to reproduce, through what hormones are, why our society is so obsessed with sex and sexuality. Talked in general terms about porn and that whilst it's natural to like looking at the naked form because it's beautiful, some porn shows some really unpleasant things and attitudes, and shows things that are demeaning to women. DD then said 'well I think it isn't very nice or good for the men in it either!' - so that told me.
Talked abiut internet safety, how it's very important that she never accept anyone telling her to keep something a secret from me 'except if it's about your christmas present mummy' and that she can always ask me anything she's not sure of especially as children often get the facts a bit muddled. She was a bit giggly and embarrassed to tell me what things she's been talking about with the girls, but it certainly wasn't porn so that's ok. I told her it's fine and natural to have private chats with her friends, but to know that she can tell me if anything makes her uncomfortable or she wants to know anything.
Phew, well that's done then - I feel better now, as I was worrying about what to tell her so that she's informed but not overloaded with inappropriate information. It's a hard balance to strike, isn't it, and what feels appropriate for one family might not be for another. I overheard her a while ago telling one of the girls in question (who is a very determined tomboy - shuns anything remotely girly and wears boy's clothes) 'you know, DFriend, when you grow up if you still want to be a boy then there's an operation you can have. My mum knows someone who did that.' DFriend thought about this for a while and said 'nah... I think I'll just stay like this' and that was it. I thought that showed empathy and consideration on DD's part, but i'm sure some parents would have been shocked.
Anyway enough of my rambling, sorry for such an epic post. Thanks again for the good advice and, as always, wonderful support. boss don't be admiring my parenting skills - I'm flying by the seat of my pants and hoping for the best! kirsty she loves the loft room - she's absolutely thrilled. 
Hope all your days are going well today lovely wise babes x