I bought this pegboard as a safer, less-toxic puzzle-like activity to replace our recently weeded-out Melissa & Doug puzzles.
My daughter, just turned two, is less enthusiastic than I had hoped she would be about it. It's not a great challenge to her since she's well versed in colors and shapes (not the puzzle's fault). The challenge enters when somewhat clumsy little hands knock some of the already standing pieces over when she tries to place new pieces, which clearly frustrates her. Because the puzzle-board is rather thin, and thus the holes shallow, the pieces are very easy to overturn when you add successive pieces. And, of course, you can't carry the completed puzzle anywhere, because they will all overturn. The easy solution to this would be a thicker board and deeper holes for the pegs, but I imagine the amount of wood required to make this minor amendment would jack the cost up to far more than would be worth paying considering the practical uses of this toy.
My eldest daughter, 4 years, who has far more dexterity, is able to put the puzzle back together carefully without upsetting the pieces, but as far as the challenge of the puzzle, it is far beneath her skill level, so she's not driven to play with it a great deal either.
The pieces are often integrated into general block building. The girls both like adding a little color to their natural wood block buildings. And the base has been flipped and used as a surface for little projects. So it's not completely without use. If I sit with my youngest daughter and help her right the overturned pieces, she will put the thing together and talk about he shapes and colors whilst doing it.
However, this hasn't been the most impressive of the Plan Toys line, and I would absolutely recommend the Geometric Sorting Board, which we also own, over this one.