Copy letters onto paper and hang on fridge. Have kids match magnetic letters to those on sheet, stating what letter it is. For further practice think of words that start with that letter.
Create changeable marble runs with sections of cardboard tubing (1 " PVC pipe sections?), decorated, magnets hot glued to hold up.
Preschoolers love magnets...
The Stay-at-Home-Mom Survival Guide: 55 Preschool Activities. -- I haven't read them all yet, but want to do the letter reversal sort with kleenex boxes, the letter matching on magnetic white board, and the milk cap name baggie.
Magnetic Board from Teach Preschool
CAUTION! Twins at play!: Magnets, Magnets, MAGNETS!