You are definitely best off teaching the sounds the letters make first rather than the name of the letters as phonics are very important in learning how to spell once they get to school and this is how preschool (in Qld anyway) teaches it. Have a google for letterland, this is what we use at work with our groups and it is very successful.

I wouldn't push it too much at three, just go for fun learning - writing usually doesn't come till they are closer to 4.5/5.