yeah, when it came up, I did. And it wasn't a big deal. It just doesn't come up often, there are gay people around, and nobody cares. It's actually exactly the way you would hope it would be.
In fact, I may be the only male in the house that uses 'gay' as a reference to homosexuality. I think to the kids gay = wimp and FWIW fag = asshole. I think. It's hard to figure it out sometimes. I just caution them that there are plenty of people who find certain terms hurtful still and they should be mindful of who is within earshot.
You should explain it to your kids, since one of your kids might be LGBT and it would be good for them to know that their parents will accept them.
For more detail read "I want to expose your children to homoseuxality" http://seldo.com/weblog/2011/08/11/i_want_to_expose_your_chi...