When my sister was little, she used to eat contato chips and mashed contatoes. She doesn't believe us now, but we all remember her saying it.
My DD used to say, M E C instead of let me see.
Sure, there's a time and a place for correcting things, but when they're little and they say things like that it is TOO cute!
DS asked me the other day what prindle meant. We were in the car. He pointed at the dashboard and said, "yes, what does prindle mean?" I looked down and said, "oh, you mean park, reverse, neutral, drive, 3rd gear and low (PRND3L) mean?" It's funny how he thought that it was a word printed on the dash. He'll be 11 in 2 weeks.