Phonemic Awareness is the ability to manipulate the sounds of oral language and it is a prerequisite for using phonics to read words. For example, children learn to change the beginning sound in a word to make words that rhyme.
Letter Recognition is a child's ability to instantly recognize the letters of the alphabet. Children need to be able to give the names and sounds for each of the letters in the alphabet as they begin to learn to read.
The following links contain games and activities to help your child develop phonemic awareness and letter recognition:
Starfall.com - ABC's
Professor Garfield - Orson's Farm