I'm not a parent, rather a child, and as someone who's relatively recently (I'm nineteen, so not that recently, but still) been on the other side of this everlasting dilemma, I'm inclined to err on the side of keeping the conversation natural, but firm.
In other words, I consider myself fortunate that I was never sat down and talked to about the "birds and the bees" on some sunny afternoon before my first date as sitcoms seem to like to encourage. As you might guess, then, I'm not a particularly big fan of "the talk" on principle for a few main reasons:
First, it's awkward for everyone. You can be as close with your child as you want, but when you sit down and make a huge deal of something like that, it'll put a whole lot of awkward in something that doesn't need it. Particularly at the age where someone might think of sitting down for such a discussion, the last thing the child probably wants is to be put on some pedestal and suddenly patronized for whatever the parent may think he/she does or doesn't know. That leads nicely to my second point.
Second, let's say you get over that awkwardness. You've read all the books about how to have this conversation and you know how to answer any question and not seem even remotely condescending. That's frustrating for us kids as well. For how fortunate I was to not endure "the talk" with my parents, I was unfortunate enough to have them resolve to the very understandable and practical alternative of sending me to (dun, dun, dunnn) a class on it. This was dreadful for me, and it drew such a strong divide between us that I wouldn't have felt comfortable asking questions, even if I was willing enough to pay attention and try and develop some from the class. Instead, I spent the whole class emailing (kids these days with their texting don't know how lucky they are) my best friend about how miserable I was, meanwhile making a point to not even act interested enough to lend any satisfaction to my father, who, naturally, was seated next to me. Bringing this point back to how it began, I can only assume that the leaders of this class were very skilled in what they were doing, they were professional sex-educators after all, and yet the whole position drew me to such a defensive position that I stood nothing to gain. Furthermore, a consequence of a class like this was that I was inherently considered to know exactly the same things about sex as everyone else my age. Call this a complaint more on our education system in general than anything, but here's a little secret about children: they don't know everything about sex, but when you tell them things they do know and act like they wouldn't have, they'll focus at least some of their effort on how smart they must be and how unimportant talking about this is, and remove said focus from the parts that they didn't already know. That will enhance the awkwardness (because they'll start thinking about the apparently uselessness) and reduce the effectiveness all 'round. It's much better, in my opinion, to get some idea of what your child does or doesn't know, then work to fill in the blanks.
Let's put it this way: from the point at which we gain consciousness of our own physical selves, we begin to learn about how our sexual organs react to the environment. That's when our sexual education starts (although I won't argue if someone argues it's sooner than that). When we're "grown up" (quotes because I'm still not sure at nineteen whether I'm allowed to speak on such a topic, but I guess I have to start some time and I am on a parenting forum so it might as well be now), we're still learning. We learn with our partners and through whatever unfortunate (or fortunate, depending on your feelings on such things, I'm not here to judge), internet search results we come across. Sexual education is an ongoing matter and should be treated as such. It isn't something that you can sit down for an hour and transfer over to your child.
I have some other issues with the idea of setting out a formal talk, but I think you get the picture.
So enough of that negativity, then. Well, kinda.
So obviously, I'm not arguing that children should be left to fend for themselves in the sexual universe. That would be positively dreadful for us all. I also don't think parents should sit idly by and wait for their child to say "hey, pops, sometimes my penis feels weird when I'm hugging a pretty girl and I was wondering in what scope that might relate to my body's changes and readiness for sexual conduct to occur," because that's probably not going to happen. If it does, cool, be ready for it with Oxford University on the line. And that's either the start of your life and this question becoming very easy or very, very difficult. But for the vast majority of child-parent relationships, I'd be willing to bet that such a comment, or one more age-suitable, won't come up naturally, and by the child's decision alone. Rather, as the parent, it's your position to build the environment where your child is intellectually curious (I use the term "intellectually" there to clarify that I'm not suggesting you promote your child's physical, sexual curiosities. I like to think that's a given but there you go.) and comfortable enough to approach you, and it's your position to drop hints and ask questions for yourself to bring the conversation out naturally. Here's something so key to what I'm saying that I'll even bold it: sex is natural, so there's no reason your conversations about it have to be anything less than that as well.
So what does a natural conversation that you might coerce look like? That's a tricky one because it depends a lot on the circumstances. I think it's also important to note here that nothing won't be awkward at first, because it takes time for everyone involved to get used to these things. But I think great starting points to build the relationship that will allow your child to ask questions freely are things like "do you like anyone at school?" or even "do you think anyone in your class is cute?"
A quick aside on that one: I specifically chose "cute" here rather than pretty/handsome to avoid some negative feelings I think those words can put off in such a context, as well as to allow for gender ambiguity in their answer. That's good for a few reasons. The most obvious and concise one, to me anyway, is that your child--shocker--might not be straight, and might know it, even if he/she/they don't know the word or even the concept of homosexuality. Second, that gives your child a solid "out." Whether consciously or otherwise, your child might not want to answer that question. You should respect that. By not making it a game of "you should tell me who of the opposite gender you find sexually attractive so I can explain to you how you're feeling" and instead building a conversation of just "hey, who does cute things in your class?" you can make the whole back-and-forth more natural, less one-sided, and more fun. If they're a straight male and so is their best friend, but their best friend does cute things now and then and they choose to share that with you, that's not a failed conversation by any measure.
Anyway, those are pretty easy examples, sure, and I'll admit that I didn't take too kindly to such questioning when I was young (I'm not sure I would now, to be honest), but it's those sorts of questions that will do three very important things for you and your child. First, you'll be opening an ongoing conversation about the other (or the same, for that matter) gender. That's not such a bad place to be for the entirety of, well, life. Second, you'll be showing them that you're ready to talk but that you aren't desperate to, or more importantly, that you aren't going to force them into an awkward corner of it. Thirdly, and this might be the most important of them all, it will let you judge your child's reaction. You can get some really valuable information from that. If they're clearly hiding something, they might not want to have this talk right now. That's okay. Just because you think it's time doesn't necessarily mean it needs to be time, particularly if you're planning ahead. If they act earnestly uninterested, that can tell you that it isn't time to have the talk even more. Perhaps they haven't started, or even just haven't had enough time experiencing, the "changes" that you want to talk to them about. If that's the case, you know to hold off for when it might become a more relevant issue for them.
So anyway, the length of this response has truly escaped me, but that's my thoughts on it. TL;DR: I think sex is natural and conversations about it should be too, but don't let your child feel like he/she/they are left out to figure it all out for themselves. Don't teach your child that sex is a topic that should be tucked away, either through making it awkward or through ignoring it completely. Be ready for them to help you guide your way through the conversation, or at least feel like that's what they're doing. Give hints, answer questions with leading (but not uninformative or frustrating) comments, and be ready to revisit topics in the future if now just isn't the right time for them.
That all said, I don't disagree with the person above who said that it doesn't really matter in the long run. All that I've said is just how I think it's the most comfortable and "effective," but when all is said and done, it'll work out in the long run. There's no real reason to worry about what balance of each path you choose.