See this article for the detailed explanation. But as they say, the short LDS answer is "no", God did not have sex with Mary.
The beauty of the LDS doctrine is it can be changed as needed. With the new marketing efforts of the past couple of decades you will struggle to find any mention of this now, at least publicly. In trying to market being "Christan" now, efforts at changing their overall history and the words of their forefathers have be moving along at a brisk pace. Seems all those "odd" ideas are a stumbling block in recruitment now.
As far as the Virgin Mary subject, it is the same as trying to nail them down on how many gods they believe in. Jello does not nail very well.
Indeed at one point in searching the actual links to the Journals and Discourses and such I found pages missing on the subject at LDS web sources. No surprise there.
However God will provide...
“The birth of the Saviour was as natural as are the births of our children; it was the result of natural action. He partook of flesh and blood—was begotten of his Father, as we were of our fathers,” (Journal of Discourses, v. 8, p. 115).
“The birth of the Savior was a natural occurrence unattended with any degree of mysticism, and the Father God was the literal parent of Jesus in the flesh as well as in the spirit,” (Religious Truths Defined, p. 44, as cited in the book, Mormonism: Shadow or Reality, by Gerald and Sandra Tanner, Utah Lighthouse Ministry, P.O. Box 1854, Salt Lake City, Utah 84110, bookstore at 1350 South West Temple, 1982, p. 260).
“The man Joseph, the husband of Mary, did not, that we know of, have more than one wife, but Mary the wife of Joseph had another husband,” (Deseret News, October 10, 1866, as cited in the book, Mormonism: Shadow or Reality, by Gerald and Sandra Tanner, Utah Lighthouse Ministry, P.O. Box 1854, Salt Lake City, Utah 84110, bookstore at 1350 South West Temple, 1982, p. 261).
Mormon apostle Bruce McConkie, in perhaps the most explicit denial of the virgin birth, wrote,
“Christ was Begotten by an immortal Father in the same way that mortal men are begotten by mortal fathers.” (Mormon Doctrine, 1966, p. 547)
You might ask, “How can Mormons who believe this say that Christ was born of a virgin?” This is done by changing the definition of the word “virgin”. The virgin Mary did not have sexual relations with a mortal man, they say, but instead was impregnated by an immortal man. Bruce McConkie wrote,
“Our Lord is the only mortal person ever born to a virgin, because he is the only person who ever had an immortal Father.” (Mormon Doctrine, 2nd ed., p. 822)
Moving goal posts is a very time honored LDS practice. Hard to be wrong when whatever you say is “right” and your detractors can't hit a moving target, at least for a few minutes.
Other sources:
http://www.mrm.org/virgin-birth
http://www.exmormon.org/mormon/mormon385.htm
http://www.carm.org/religious-movements/mormonism/was-lds-jesus-born-virgin-mary
Prophet Brigham Young (1801 - 1877):
While brother Joseph was referring to the provinces of God, I was led to reflect that there is no act, no principle, no power belonging to the Deity that is purely philosophical. The birth of the Saviour was as natural as are the births of our children; it was the result of natural action. He partook of flesh and blood was begotten of his Father, as we were of our fathers.
(Prophet Brigham Young, Journal of Discourses, v. 8, p. 115)
... I believe the Father came down from heaven, as the apostles said he did, and begat the Saviour of the world; for he is the ONLY-begotten of the Father, which could not be if the Father did not actually beget him in person.... I believe the Father came down in His tabernacle and begat Jesus Christ.
(Prophet Brigham Young, Journal of Discourses, v. 1, p. 238)
Apostle Heber C. Kimball (1802 - 1868):
... In relation to the way in which I look upon the works of God and his creatures, I will say that I was naturally begotten; so was my father, and also my Saviour Jesus Christ. According to the Scriptures, he is the first begotten of his father in the flesh, and there was noting unnatural about it.
(Apostle Heber C. Kimball, Journal of Discourses, v. 8, p. 211)
Apostle Orson Pratt (1811 - 1881):
God, the Father of our spirits, became the Father of our Lord Jesus Christ according to the flesh.... The fleshy body of Jesus required a Mother as well as a Father. Therefore, the Father and Mother of Jesus, according to the flesh, must have been associated together in the capacity of Husband and Wife; hence the Virgin Mary must have, for the time being, the lawful wife of God the Father.... He had a lawful right to overshadow the Virgin Mary in the capacity of a husband, and beget a Son, although she was espoused to another; for the law which He gave to govern men and women, was not intended to govern Himself, or to prescribe rules for his own conduct.
(Apostle Orson Pratt, The Seer, p. 158)
Prophet Joseph F. Smith (1838 - 1918):
Now, we are told in scriptures that Jesus Christ is the only begotten Son of God in the flesh. Well, now for the benefit of the older ones, how are children begotten? I answer just as Jesus Christ was begotten of his father...Now my little friends, I will repeat again words as simple as I can, and you ask your parents about it, that God, the eternal Father, is literally the father of Jesus Christ.
(Prophet Joseph F. Smith, Family Home Evening Manual, pp. 125, 126, 1972)
Prophet Joseph Fielding Smith (1876 - 1972):
Christ Not Begotten of Holy Ghost... Christ was begotten of God. He was not born without the aid of Man, and that Man was God!
(Prophet Joseph Fielding Smith, Doctrines of Salvation, v. 1, p. 18, 1954)
Apostle Bruce R. McConkie (1915 - 1985):
Christ was Begotten by an immortal Father in the same way that mortal men are begotten by mortal fathers.
(Apostle Bruce R. McConkie, Mormon Doctrine, p. 547, 1966)
And Christ was born into the world as the literal Son of this Holy Being; he was born in the same personal, real, and literal sense that any mortal son is born to a mortal father. There is nothing figurative about his paternity; he was begotten, conceived and born in the normal and natural course of events, for he is the Son of God, and that designation means what it says.
(Apostle Bruce R. McConkie, Mormon Doctrine, p. 792, 1966)
As far as this life is concerned, [Jesus] was born of Mary and of Elohim; he came here as an offspring of that Holy Man who is literally our Father in heaven. He was born in mortality in the literal and full sense as the Son of God. He is the Son of his father in the same sense that all morals are the sons and daughters of their fathers.
(Apostle Bruce R. McConkie, Mortal Messiah, v. 1, p. 330)
Prophet Ezra Taft Benson (1899 - 1994):
The Church of Jesus Christ of Latter-day Saints proclaims that Jesus Christ is the Son of God in the most literal sense. The body in which He performed His mission in the flesh was sired by that some Holy Being we worship as God, our Eternal Father. Jesus was not the son of Joseph, nor was He begotten by the Holy Ghost.
(Prophet Ezra Taft Benson, The Teachings of Ezra Taft Benson, p. 7)