Catholics do do sex education, at least catholic schools in the UK do. Though we had no nuns at my school, sex ed was taught by a priest and two teachers (one an RE teacher) and there was an emphasis on marriage and so on.

The main reason the population of catholics is dropping is the controversy of Vatican II when the pope of the time refused to consider the ending of the ban on contraception.
The catholic objection to contraception is based purely on the anti abortion bias they have. Prior to the invention of the pill and reliable condoms, most contraception methods were basically early stage abortificeants (essentially a poison that killed the feotus before it could implant) and where therefore counted as abortion and therefore against catholic doctrine. While modern methods may not be abortion (depends on your definition, though I feel that something which prevents fertilisation taking place at all cannot be an abortificeant) they are contraception and the papal bull banning contraception is specific to contraception.

Most modern curricular now consider sex ed as part of citizenship/PSE - stuff about disease and contraception being considered as social concerns in the same light as drugs. The idea there is to also consider the ethical and religious concerns. The mechanics come into it during biology lessons.

I think the important point about sex ed is to make it sensitive to the concerns of parents of particular religions but not hiding any details.

The trouble is that some people (and I am not just talking religion here - certain 'moral majority' types who are not necessarily religious have this thought too) beleive that if you do not tell children about sex they will not do it therefore there is no problem. However, I beleive evidence against this can be seen in the teenage pregnancy stats following the implementation of schemes where no sex ed is done - they rise dramatically. This is because education is not as simple as 'what parents/teachers tell you'. Children learn from many many sources and they evaluate and judge those sources and often parents/teachers are not seen as the best source. They pick up information from TV, from the internet, from other children and not all of it is necessarily correct or accurate. If you listen to a playground you are likely to hear hundreds of myths about sex - none of it garnered from sex ed classes, all of it with varying degrees of accuracy. How many people here heard the rumour that you cannot get pregnant if you have sex standing up? These myths are implicit in the memplex that adds to a child's education and yet they have not been taught and you can't really work out where they come from. I suspect it is a form of constructivism - misconceptions children have before they get educated - based on the strange, skewed logic that sometimes underlies 'common sense'.

Therefore, whatever your religion, it is good common sense to make sure that they get a good quality sex education. Otherwise they will get a really bad one from each other and not know all about how disease is passed on, how pregnancy actually happens and so on.

The trouble is, many religions see any education in social or religious matters outside of thier own community as subversive. The more you corrupt the memeplex with outside influences the less potent the religious message. They already have problems with television, computer games, the internet and so on. They are trying to keep their memeplex, their religious message, pure. The main problem here is that most of the messages they are protecting are not relevant to the modern day.