Anyone use Souns?

This is the first time I've seen it. I think it's kind of silly to spend that much money on letter shapes when it's so easy to find other ways to show your kid letters. Your house is full of printed material, and refrigerator magnets or foam letters are cheap.

I'm also skeptical about the idea that it's so much better to teach letter sounds instead of letter names. A kid can easily learn both the word "dog" and that a dog makes a "woof" sound. It isn't really any harder to learn both the letter name O and the sound O makes. A kid can't get too far into reading without having to learn that many letters can make more than one sound, anyway - and wouldn't it be even more confusing to learn that O doesn't always sound like "ah" if you had learned that its name was "ah" and had never before been told that a letter's name and sound could be different?

I suppose learning lowercase letters first does make sense, but a kid is going to have to learn both capitals and lowercase before doing much reading, so it probably doesn't really matter that much which comes first, or whether they learn both at the same time.

Really don't mean to pick apart your post, but I disagree...
If you're actually looking to teach reading; yeah, kids will learn faster if first taught the letter sounds, and lowercase letters. When reading, only a small percentage of letters are in the uppercase. And the sound of the letter is what needs to be most strongly associated with the image of the letter, because to read you say the sound, not the name, of the letter. Also, there is no need to learn the names of the letters: even if you send your dc to school, literacy tests will accept either the letter's name or sound as an appropriate response.
The difference between learning that dogs say woof and that p says /p/ also exists, in as much as we label thousands of dogs as 'dogs' over the baby/toddler years. It is really rare to walk down the street with a baby in a sling and say "hey, look at that S over there!". And so kids have lots of time to learn to categorize dogs as dogs and to see the difference between, say, a dog and a cat. With reading, they have not had so many opportunities to learn to differentiate 'p', 'q', 'b' and 'd', for example.
Just my two cents about the theory...
That being said, I think it is really easy to learn all these things at say, age six or seven, whereas it is much more difficult at age two or three. I personnally wouldn't be concerned with early literacy in the sense of learning to read; it's more a question of learning to appreciate being read to. The first steps of learning to read are: learning that text carries a message, learning that reading progresses from front to back of the book and from left to right... the types of things kids learn when we read to them.

Well, I disagree back!
I imagine it's true that the fastest way to get from not recognizing any letters to sounding out simple words would be to learn letter sounds only, and only lowercase letters. But sounding out words like "cat" is only the very first step in learning to read (well, after the steps you mentioned, like learning that text carries a message.) Pretty early on, a kid needs to learn how to deal with silent e, and vowel combinations - in other words, she needs to learn that some letters can make more than one sound. And I suspect that at this point, the kid who doesn't know letter names is going to have a harder time. For instance, you won't just be able to tell that kid that "when two vowels go walking, the first one does the talking and says its name." You'll have to say "the first one does the talking and makes a sound that as far as you know is completely random and has no relationship to anything you already know about that letter."

So my guess is that actually getting all the way through the learning-to-read process isn't any faster for the kid who doesn't learn letter names or capital letters at first. Not that it really matters - it's not like learning to read a few weeks or months faster (or even a year or so) is very important in the long run.