I approached answering my daughter's questions as I would have questions about the "birds and the bees"--just answer the specific question asked and nothing more. When she first asked, at the age of 2 1/2 why she had to take pills, I simply responded, "Because you have cystic fibrosis and your tummy doesn't work right." She accepted that at face value and parrotted it to anyone who asked her about her enzymes.
At first I had been afraid to tell her the "awful news" that she had cystic fibrosis. But I finally realized that, for her, those words did not hold all the meaning they did for me. They were just words, no worse in her young mind than being told she had a runny nose. She would take her cues from me, so as long as I was calm and matter-of-fact, she would take the same attitude.
As she grew and her thought processes became more sophisticated, so did her questions. But I kept my same attitude and simply answered the specific question she asked at the time. If my answer led to more questions, we dealt with those. I always believed that if she was mature enough to come up with the question, she was mature enough to deal with the honest, but always gently phrased, answer. I determined to never lie to her, no matter how difficult the question. As a result, she always knew she could come to me for answers. As she got older, this sometimes led to late-night discussions as we both struggled with difficult and painful issues. She learned that she always had permission to have her own feelings about the issues, so sometimes she expressed anger, sometimes we cried together, and often after a long discussion, we released our feelings by being completely silly and laughing together.
Sometimes it's tough to know how much to say and how much to hold back. Just be sensitive to what your child really wants and needs to know at this point in his/her life and go from there. A lot of it is getting to know your child really well and listening to your intuition.