I have a 6, 5,4,3,1 year old and this is what I do:

I played a lot of games with the kids. I made up cards with letters of the alphabet on them and hid them. The kids would find them and tell me what it was. I found Sesame Street to be helpful and they actually learned quite a bit from it - numbers, letters etc. We made puppets - they represented the phonics alphabet - A = Alligator, a short song would be sung with each puppet. the kids have had great fun with this. Also I would say, go find something in the house that starts with the "B" sound. They would bring back stuffed bears etc. And then I agree with the READ, READ, and READ some more. Let them see you reading, take them to the library. Teach them how to listen to books on tape. Play with large Legos to learn colors (give me the blue Lego, then red etc). You can teach counting by having them get 4 forks out of the drawer and help you set the table. Or make a pile of M & Ms and eat one and ask how many are left. I actually did no formal school until this year when we started first grade with the older two. They are doing great and love it. Basically just being with your kids and being aware of natural teaching opportunities was enough to prepare them for first grade. You'll be surprised how much they learn in a very short time of interaction. Have fun with your kids. Before you know it they will be graduating.....(YIKES)!