I am the product of two (liberal) educators and so from a very young age was using proper terms for the parts. My mom always told the story of when I was 2ish and I confidently informed my grandma that little boys have a penis and little girls have a vagina. She said my grandma nearly died laughing so hard at an itty bitty girl informing her of body parts!
Here is what I know from a child development aspect, when you teach a child to call their penis or vagina or butt by a nick name (because its easier for you), it gives them the message that they should be ashamed of those parts and that they are not something that can be openly talked about. I know it sounds crazy, but cognitively and psychologically this can cause an array of issues from promiscuity at a young age, to hiding health issues they may be experiencing, to hiding their sexual preferences, to feeling ashamed of their bodies, or feeling like they can't ask questions about changes they may be experiencing.
From an education standpoint there really should be no reason not to teach your child the proper terms for ALL of their body parts. It is not only going to be beneficial now (so you won't have to re teach them later), but also when they get older and you are ready to have "the talk" with them. Don't you think it would be somewhat awkward to be talking to your 11 year old boy about the function of his twigs and berries?? Or better yet, your 11 year old daughter about her hoo-ha? There is no reason not to use the words penis, vagina, butt and testicles to describe those parts just like you would describe legs, eyes, arms, toes or ears! They are all parts of our body and that is a fact. Personally, I would much rather be the one to teach my kids about their body part and functionality then them learning about it from some kids at school!
So, let's get out all your giggles and embarrassment now and repeat after me:
Penis, Vagina, Butt, Testicles...Penis, Vagina, Butt, Testicles...Penis, Vagina, Butt, Testicles...one more time...Penis, Vagina, Butt, Testicles!!!
There we go, now that we have that taken care of, you can confidently say those words in front of your kids or other adults without blushing or giggling. So go on, start teaching your kids the proper terms for their parts...trust me, you will be glad you did!