I wouldn't start the conversation, because very young children usually ask this question on their own, and asking shows they're capable of thinking about it and interested (in other words, ready). If they don't there's always a way to "inspire" their asking, by bringing up a relative or friend who is expecting a baby (or even mentioning that someone who looks "very pregnant" on television "must be having a baby").
Again, though, most little folks ask at around three years old or so.
My approach was to answer my three-year-old's question by explaining that babies "grow inside a lady in a special sac meant just for that". (My first child was adopted, so I didn't used the words, "mommie's tummy". Also, I wanted to mention the sac, because little kids can sometimes imagine all kinds of outrageous things if they don't understand that the baby is in a "special place" - rather than someone's "stomach".)
As it happened, none of my children asked how the baby got there until they got to be around five. So, I let that part of the story be left untold until they asked. If I had been asked before they were five I would probably have said, "I'll tell you another day." (Right or wrong, I happened to believe that really young preschoolers just can't digest too much information at one time. Even when parents tell very young children some things, the littlest ones can get confused anyway.
By the time they were five they had already known about how unborn babies grow for quite a while. The question about how they get started growing came naturally, and answering a five-year-old was not a big deal and not as likely to cause confusion. One of my sons pressured me with the question I was hedging on; and when I answered actually said, "What'd you tell me THAT for?!!" I said, "Because you MADE me tell you!" I guess that taught him about that advice for lawyers about never asking a question to which one doesn't already have the answer. :)
To me, though, even if answering the question doesn't necessarily go as smoothly as we would like, it just seems to kind of make sense to wait until the child asks (because, in general, that's a sign he's ready to know - at least a good part of the time, if not in my son's case).