A.L.
I just wanted to add something to the advice you got already. I REALLY recommend buying the Leap Frog Letter Factory. I am a teacher myself, and I do believe in limiting TV, but this movie...I let him watch it as often as he asked to. My friend borrowed it to me first of all. She told me that her daughter learned to identify AND the sounds of each letter in 2 weeks. Honestly, that is ALL it took my son. 2 weeks. And he wasn't even 3. Our youngest was kind of watching it along with him (he's now 23 months), and we didn't know it at the time, but he was picking up letters and sounds, too. He already knows what sounds P, D, M, B, and a few other consonants make. You DO have to reinforce the concepts after your child is done watching. We'll do this as sort of a game. I'll ask him what a letter is...or what sound this letter makes, etc. He's really close to reading right now.
This video is such a great tool for teaching phonics and pre-reading skills, that I just can't say enough good things about it. I think everyone should have this video. They also have a Leap Frog Word Factory, which is the next step in the series and actually teaches reading. I am using these videos along with the BOB series of books (simple, one vowel w/two consonant words) to teach him to read. My goal is to have him reading this year.
Your 2 year old might be a LITTLE young yet, but in about 6 months, I would definitely start with the video. And it's never too early to start with letter recognition.
Also, I wanted to say, if you're doing home preschool, do a lot of art projects with different mediums and supplies. Getting their imaginations moving at this point is critical in their development. Good luck!!