We talked to my boys when they were 3 about being touched inappropriately, just an ongoing dialogue. We keep it simple, but serious. Teaching them young is really the best way to go. What kind of touching was okay, to say no, to not keep secrets for any adult or child who tries to touch them, that anything in the underwear area is NOT okay to be touched unless it is only for cleaning by a trusted caregiver, and if it is uncomfortable of goes on for too long, then to fight it and say stop and report it.... Only family and the Dr can see us naked, and only when bathing/changing clothes/getting a physical. We even tell our children to report if mom/dad/Dr is touching inappropriately, we want them to know we will listen to them and protect them and that noone is 'above the law' in respecting their privacy... and that they are required to respect other people and children's private parts... so they shouldn't touch another's private area.
Dr. Sears is an expert in this field and he has an article called "Genital play, what's normal and what's not". It has some great advice for you about talking to your children to consider here:
http://www.askdrsears.com/topics/child-rearing-and-develo...
and:
http://www.askdrsears.com/topics/child-rearing-and-develo...