There's a long way to go between kissing on the lips and sex. But knowing that kissing on the lips is different is an indicator in knowing that there's something else out there between boys and girls besides friendship.
The mechanics of babies are not news to our children -we have always had a book lying around (see the sex books thread for clarification), we have not yet had to delve very deeply into the deep and meaningful side of adult relationships, but I doubt it's far away. We get it extra tough/easy because several of our childrens's friends parents are gay couples, so we get to differentiate between the mechanics and the loving relationship bit. Plus we get to go into IVF etc.
Fun!