My son is doing home preschool with the Utah UPSTART program. It's all on the computer so I like to supplement with regular activities. I use resources on my Home Preschooling Helps post to find ideas.
I discovered this fun chalk and water activity On Gayle's Preschool Rainbow (scroll down to 'Erasing with Water'). My son actually enjoys practicing letters with this method. We have small chalkboards that we got from a friend who's a retired teacher.
(No Biggie has a guest post on Make and Takes that shows you how easy it is to make your own chalkboards!)