Like others, I have used the correct words from the start. When washing etc, it has always been "penis" and when talking about me we have said "vagina". DH is very much of the opinion that it is also important for them to know the slang words, as they will hear these at kindy etc. So we have introduced those too, but taught the correct words first, and still use these most of the time. I can't see the harm in them knowing alternative words, as long as they know the correct ones too.