Yes. The kids can recognize McDonalds versus Jack-In-The-Box. They're keying in on shapes and logos, without understanding the spelling differences. That's how it was for our granddaughter when she was three. Now she is four, and reading words besides being able to write them. She began to stumble at lower-case versus all upper-case, but has a handle on it now. When she goes to Kindergarten in next September, I cringe to think they would bore her with sight-word crap. She'll climb the walls in boredom. Teach at home, because the schools aren't cutting it.
Oh believe me, I have a 4 year old and I certainly do!