This is a great way to introduce phonics to your little ones. My daughter wasn't interested in learning her letter sounds so I started building my Jolly Phonics collection. We often sit together listening, reading and singing this and she enjoys it thoroughly. After only a few weeks she has started singing the verses herself while she plays and even asks to put the CD on!
I found it much easier with my 3-year-old in the beginning to put each track on repeat 3 or 4 times to get the tune to 'sink in', and to introduce a few letters at a time.
I was advised to invest in Jolly Phonics by a teacher at my daughter's pre-school because the local schools use the phonics teaching system. I have found it very useful because now I know I can help her at home with the same system so that she does not become confused.
With our progress so far I can highly recommend this series too!