We are on our second Leapster and really like it. I have a 7,6 and 2 year old that all use it. My 2 year old can sing the Letter Factory letter sounds song which is basically phonics. I tend to save it for things like trips in the car, Dr appt, etc. Times for when it help to keep them occupied. I think that it really depends on the games that you get with it. As I mentioned, we get a lot of use from the Letter Factory game, but all the boys turned up their noses at the Backyardigans games.
All in all, I really recommend it.