Good for E! I always figured that if a child can identify a picture of an apple they should be able to identify a picture of a letter. My daughter could identify all of her letters and knew their sounds by the time she was three. (Might be partly due to the fact that she has three older brothers???) :)
Love it, where did you get the letters?
O's grandmother bought her the sandpaper letters a few years ago, and I think (but I'm not sure) that she got them from the Montessori Outlet.