i think that while you do need to explain boundaries to the children.. looking and touching each others private parts at that age is normal.

i'm not sure what happen in your childhood.. but i think that you don't need to go to extremes such as not letting them play together or not leaving them alone when they are playing together.. they are just kids.. they are curious about theirs and others bodies..

explaining what is considered appropriate is a good idea, but you don't need to freak out too badly if they do something, just remind them gently about what you talked about.