For better, worse, or just different, I've taken a very different approach with my kids. Our bedroom door has a lock and we have always told our kids when we want to be left alone because we want to have sex. Since we so openly discuss it I was surprised when my 8yo said that sex was something that hurts mommies... by hearing me he just assumed...
She may not be old enough to have sex, but she's certainly old enough to masturbate, which is it's own way of "thinking" about it, so you might want to keep that in mind when talking to her. Did you hand her the book or go over it with her? Did she ask questions then? If not, maybe a new book that you go over together would be a good idea. Also, maybe talking to a counselor yourself to learn how to commuicate about it in a healthy way, without the influence of the demons from your childhood. Planned Parenthood has some phamplets on talking to young kids about sex, various topics for different ages & such too. Good luck.
snopes.com has this to say about the bracelets, which puts it a good perspective, also later comparing it to the soda pop tabs of my generation:
"Officials at each of these schools have taken this stance [of banning the bracelets] not because the acts signified by various colors are being carried out, but to protect children from premature sexualization. Nothing in the various "sex bracelet" news stories we've pawed through indicates girls are actually using these fashion items to declare willingness to engage in various acts, or that boys are breaking girls' bracelets in the belief that so doing grants them a right to claim what they think has been advertised. Rather, the bannings are an attempt to unring a bell — to return children to a time when they weren't so focused on sex.
Premature sexualization of young people is a valid concern, which is why parents are up in arms over the messages the bracelets purportedly communicate. Even if there's no actual hanky-panky going on (and as we've said, we see no reason to suppose that there is), such rumors encourage youngsters to view themselves and their classmates in sexual terms. It's disquieting to imagine children in Grade 3 mulling the possibility of lap dances, let alone of oral sex or intercourse. Such codes and rumors also serve to desensitize kids to the physical side of love, to lose awareness of its importance and specialness..."