In our family, we have discussed a lot of pregnancy and baby related topics. In my experience, this provides an opportunity for us to learn from our kids as well as the other way round. Questions are almost inevitable when you are pregnant; they prepare your older child for a new baby. My policy is to answer my kids' direct questions, without giving too much information. Perhaps we sometimes get ahead of ourselves and give more info than our young children were really looking for. If your child is curious about how babies grow in their moms' tummies, I find picture books the easiest way to explain. When they have a visual explanation, children understand much more easily.
Pregnancy is a pretty complicated process that is hard to put into words that toddlers can understand. Something simple is perhaps best to start off with. Babies stay in their moms' tummies for around nine months. They start off really tiny so small they can only be seen under a microscope and stay in their to grow. When they are ready to come out, they will. But that doesn't mean older kids will immediately have a playmate, because babies keep on growing once they are on the outside. We have said something along those lines, but it is entirely possible that young kids will ask questions about how babies are made, how they are born, how exactly unborn babies get food, and more.
I found biology books the easiest way to explain. There are many fun and beautifully illustrated books on the topics of pregnancy, birth, sex, and adoption around, too name just a few. Books are a great way to announce your pregnancy to your other children if they are too young to understand what it means, as well. If you are relaxed and willing to answer all questions, your kids will thank you!