DS1's preschool used this, and so does his kindergarten.
I didn't get to see it in action in preschool, but I did see him bring home "Mat Man" drawings, in a booklet for the year. :) I did see little worksheets they did, I think they saved these for the 5 year olds, though they would not have *refused* it to a younger child. It's pretty basic, the handwriting sheet lines and a model letter, spot to trace, spaces to write.
In kindergarten, at the beginning of this year, I was there for the introduction of a couple of letters. They used the sticks to make the letters. I don't know if this game is part of the Handwriting without Tears or just plain fun, but the children themselves would lay on the floor to make the letters, like old-school Sesame Street. :)
Then, because it's kindy I guess, they'd go and complete the letter's page in their "handwriting books".
It seems to be a pretty fun, low-key way to introduce writing that can progress with the kids as they get older.
I would HOPE for 3 year olds it would mostly stay with the sticks, playdough, experimenting with letter shapes...and that "writing" would still consist of experimenting with pencil and paper without the expectation of reproducing a particular letter or word... :)