I am a speech pathologist and have worked in full inclusion elementary schools. My experience has been that by about secnd grade kids are asking questions about others' disabilities. I worked closely with two families (one has a child with DS and one with autism) to work on teaching the peers about disabilities and what to expect behavior-wise from the children with disabilities. Basically the parents came in without their child and explained some of the different things the child does. By giving the peers a reason for the behaviors, teasing and stares were virtually gone.
As far as telling your child, the one with autism would tell someone, "I have autism, so your screaming is bothering my ears..." Since the peers were taught about his differences, it made sense to them and they stopped whatever was irritatingto him.
On a more personal level, my cousin has a DS with high functioning autism and they talked about it very openly from the time of diagnosis around 4 years old. He also can tell his peers that he has autism and that is why he does things differently. They recently moved to a new state and he is in 5th grade. He has friends, plays on a football team and is doing well. He does not use his autism as an excuse, but as a reason for the way he needs to do things sometimes. He is extremely intelligent, so he does well in school, but his sensory issues are difficult socially and he has a way to explain how he feels with his peers.