S.,
Take a deep breath and know that you are not alone. Being at home full time after working full time takes getting used to. It took me a year to figure it out and now the idea of working full time stresses me out. :)
I noticed that you have received a lot of advice on keeping the house picked up, so I will try to address the "what do you do?" part of your question.
I have 2 girls (4 and 14 months) and summers are hard b/c there is no real routine/schedule. Here are some of the things we do to spend our day (without too much tv):
1. Check out the DFW community calendar for a schedule of things around the metroplex. You can find it here: http://www.town-mall.net/community/events-july.html.
2. If there is a mom's group near you check it out. I am involved in MOPS and in a local group called SMILE. We don't do everything they offer, but it has been great to meet other moms who are in the same boat I am and it's been great to have scheduled events to go to if we want.
3. Instead of the tv, we turn on the radio. We get XM radio through our tv, so I turn it to Radio Disney during the day. It's nice to have some music on that we can all listen to (and doesn't sound like little kid music). Plus we dance around to it or I clean to it while they are playing.
4. Play outside in the morning. We go to the park or play in the back yard as much as we can in the morning. This can get boring me, but I try to do some of my outside chores while they are digging in the sand box. we also play with chalks and bubble, and we paint the fence with water. It can be a lot of fun.
5. We have kids over a lot. I will have mini-parties for my oldest and her friends. Some themes we have are a bring you own toppings pizza party (I supply crust, cheese, and sauce), cookie decorating party, unbirthday party where each guest buys something at the Dollar Tree (so it only costs $1), wraps it and every one gets an unbirthday gift, slip-n-slide party, book party where guests bring their favorite book and we read them (I supply snacks), and before we got grass in the yard we had a "see how dirty you can get" party and gave prizes to the muddiest kids. A couple of weeks ago we had our second annual diaper and wipe dinner where we feed you dinner (hot dogs and such) and you bring a pack of diapers and wipes for the community pregnancy center.
6. Volunteer. I know that seems weird to do with a preschooler, but my daughter and I go to the local food pantry and sort canned goods, restock the shelves, and get bags ready for families when they come in. She is learning how to serve/help other people and we both feel really good about giving back to our community.
7. Look for free places to swim. We visit Granbury's city beach quite a bit. It's free and so much fun. If you live near a lake there are usually free beaches to play at. Sometimes there are even trails to walk through. We use to do that a lot (I am not sure why we haven't done that this year. hmm.).
8. Also check out local YMCAs to see what they offer. A lot of times they will let you visit 2x for free. We went and climbed the rock wall in Benbrook one after noon and then went the park next door for a picnic. It was a lot of fun. I have also asked the neighborhood fire department if we could see the trucks and the inside of the fire station. They are usually very excited about showing the kids (and you) around, and the kids love it.
I hope you get inspired a little bit. We do still watch tv. I don't want to make it sound like we don't. The tv is on until we finish breakfast, then it's the radio until nap where they can watch a cartoon before nap. Then it's off again until before bed when they watch another cartoon to settle down a bit.
Good luck and have fun!