This happened last year, when Seth was nearly 3 and had just finished potty training.
Scene: lying in bed reading books to Seth, who has both hands shoved down his pajama bottoms.
Seth: My pipi falls off.
Me: No, it doesn't.
Seth: Pipis don't fall off?
Me: No, you'll have your pipi all your life.
(Seth pulls down his pajamas to show me a tiny erection)
Seth: It gets big.
Me: So I see.
Seth: It gets little too.
Me: Yes, it can be big or little.
Seth: Pipis don't fall off when they get little?
Me: No. They stay on, big or little.
Seth: Don't worry about it then.
Me: That's right.
Seth: I need to pee.
Me: I thought so.