Magnetic Alphabet Farm is a very simple book that I picked up about a year ago (LOVE the Bargain Books section at Borders!). It's a magentic book. It comes with the letter magnets and each page has places for the magnets as you read the story. The back of the book has this 2 page spread of the alphabet in order. Taylor loves this book.
I just discovered another super cool blog! It's called Teach Mama and she has lots of super cool activities for preschoolers to teach letter recognition (and just about anything else you could want to teach them!). Check it out!