My DH was squeamish about me taking showers with our DS, but as I grew up in a very open household, my answer was simply 'When he starts to notice a difference, then some modesty will be exercised. Until then, he doesn't care.' Don't want to warp the boy, after all...
I used to always let DS come into the bathroom with me, or at least leave the door open if he and I were home alone, until one day, about 2 months ago, he watched me sit down and commented, 'Mommy, you have a bigger bottom than I do.'. Stifling a laugh, I agreed with him. Then he looked me right in the eye and asked, 'Do you have a bigger pistol too?' Let me explain that -- pistol is what he calls his... er... equipment. I guess because you have to aim it. We have no clue who taught him that.
When I told him that Mommy didn't have a pistol, he looked very worried and asked 'Then how do you go potty??' and proceeded to try to climb into my lap (I'm sitting on the pot, mind you) and look. Blushing furiously, I suggested to him that it was a good time to play with Playdoh, which got his mind onto another subject and got him out of my lap!
So as a result, I'm a little more modest around him. As long as things are covered, he can see me partially dressed (i.e., bra and panties). But no more Full Monty for me!