Tell her the truth, answer her questions but keep it pitched to her level.

My then 3 year old asked how his baby sister was going to get out of my tummy and I told him honestly. I can't remember if he asked how she got there, but he does know you need a mummy and a daddy and that only mummies can have babies, etc.

I don't think making up cute stories to kids is a good idea (no offense to anyone). You don't need to go into gory details, but I think it's easier and less confusing for everyone. I know a couple of times that I felt like an idiot as a child/young teen as I had child-happy version down as fact when it was just nonsense.

I would just tell her the truth, spare her the detials though. Knowledge is power right? Just put it at her level.

She has asked how the baby will get out already. I just told her Mommy had to go to the hospital and a doctor had to take the baby out. She was pretty satisfied with that and didn't ask anymore questions. She has not asked how it got there yet but I am sure it is going to come eventually. I found a book that explains it for kids under 6. I was thinking about looking at it just to see what it said and then maybe reading it to her or using some of it's words lol! I don't want to lie to her (the stork thing or something like that) but I am just not sure how to explain without getting scientific! I am sure when the time comes I will figure something out.