Wow, this is really a frightening thing, and frankly I don't know who I would call, definately her mother. I have known of very young children that have discovered their own private parts and ....

But never ever have I heard of a child that young "playing doctor". And it's been my experience that when children hit that stage of curiosity the very last person that they're going to explore with is an adult! For a three year old to strip (also a very natural thing in and of itself) and call your husband in....

That is simply beyond words. Really. A three year old's world is very small, something is not right. Your friend separating her kids does not appear to be doing the trick. I PRAY that her behavior is prompted by the older child's experimentation. He really needs the "this is not appropriate" talk!