TWELVE??? Good grief, the person that suggested that is just wishing. I'd rather my children learn from me instead of their peers at school or some trash they were learning from TV/internet/music stars. I was in 4th grade when they had to start the class with us at school, and not a minute too soon! I very distinctly remember learning from a 4th grade boy about periods and being apalled and horrified that "girls pee blood" and I looked to my teacher, who looked down at her book very hard. The next week, boys went to one room, girls to another room, and I was SO relieved to hear what the truth was and that we weren't breaking down or whatever. In 5th grade, me and 3 of my friends started our cycles. In my 8th grade class, there was a girl that was pregnant, and we lived in a very nice place. Waiting until you're "12" or whatever is waiting too late.
I can't tell you definitavely what to do yet because my boys are very young (though I stay open with them and am already having to fight stupidity he's learning from his preschool class), but also because every child is different. When asked "why are they naked" at a museum, we are very casual and just say "God made the body. What God makes is beautiful" and leave it at that. But when my 4 year old sees a doll with its pants down and he says "Oh no, nasty!" I say "Why do you say its nasty?" and he answered "I don't know" or "__ in his class said so" and I just say, "There's nothing nasty about your body. God made you perfect. But there are private areas that are special just for you and you don't need to show anyone or see anyone else's---these are your private areas, they should stay private, but they are not nasty". That's our 4 year old stuff right now. I don't want him thinking there's something wrong or taboo there. But as for actual sex, which your child is actively seeking out, I would say you do need to be up front and honest.
Read a book yourself first (I've heard both the books you've received suggestions on: the American Girl one and the "It's So Amazing" book mentioned a couple other times on this site. Scan through it (or both) and know what's in it. Then I'd suggest saying that if she has questions or wants to talk, you are there to guide her and talk to her. Tell her you know she's got questions, and you know she needs to learn. Ask her first what her questions are, and listen without judgement, and when she's asked what she wants to know, you'll know how far you need to go for that time. Start at the beginning with the most pertinent things to her age (her body, how it works, about periods), and then move on to what she wants to know, but make sure you cover why things are a certain way. It's not a taboo thing, but it's not ok to practice at this time. I would have a heart to heart explain not just the body, and sex, but also discuss the emotional ties and potential pitfalls of moving too quickly (not just stds and pregnancy, but the emotional parts, the perception, the reputation, etc). I would also talk about reasons why people sometimes mistakenly think they "need" to engage in sex and why you think that's not right (to get someone to like them, to be popular, etc). I say that because honestly, she's looking up Lady GaGa. She's seeing the hyped up, glorified versions of sex and she's gonna want to know why it's not "cool" if it's not. Ask HER questions too, as you go through the talk, again to gauge where you're going and when you can stop (this is a talk that will go further as she ages and matures, it doesn't ALL need to be said at once), but also to show respect and a desire to understand her. That builds trust. You'll hopefully get a glimpse into what she's heard or where she's coming from through a 2 way conversation, without having to confront her with a direct question she may feel uncomfortable answering at first.
And I would TOTALLY take Kelly's advice on advising her not to talk to her friends about it because it's something that is personal and each mother needs to pick the right time to talk to their daughter. Don't ruin that for the other family. I don't want to be my boys' "friend" but I want to be aware of my influence and job to guide them....and to keep that I need to establish trust early on. So telling the truth and not sugarcoating it with "hugging someone hard" is going to be pretty important. Good luck!