Just as another datapoint: I was implanted in 1990, at age 7. My parents did talk to me about the implant, and I did understand basically what was going to happen - looking back, I'm glad they did this. I do remember having a lot of fears about the SURGERY and not the IMPLANT - it's pretty difficult to separate those things for young kids. In my case, it was heightened by the fact that I'd had a difficult recovery from anesthesia on my 6th fistula surgery (the implant was my 7th and final surgery).
Today, I still wear my implant, for the most part - but I have considered not wearing it. Day-to-day, it makes my life easier, and I enjoy being able to hear my 2-year-old talk, and all the usual things like that. However, I will confess that sometimes when I'm alone at home, I'll just take it off - "for a break" - and it can be nice and peaceful. Doing that did cause me to miss a UPS delivery dropoff today though... grr!
I'd say that if your child is old enough to understand at all, they should at least be made aware of what's going on. Any kid - especially one that's NEVER heard - may have some weird or scared reactions, especially at activation - but, like I told my mom the day after I was activated, "I think it's going to be just fine." You have to be willing to push a little bit, and to work HARD, but it can happen - and there's always the option to take it off for whatever reason later - just like I'm doing now, even though I'd never consider going into a law firm for an interview without it! It's a continual back-and-forth, and I don't think anyone should let themselves be swayed too much by the "militants" on EITHER side of the spectrum. Different choices are appropriate for different people, and the important thing is caring enough about your child to take the time to learn about which options may be appropriate for them in their individual circumstances.