My daughter has been playing on the computer since she was 3. Now, just past her 5th birthday, she's really self sufficient on the computer and her reading is far advanced to those in her kindergarten class. I can't attribute that only to computer time, but I personally think the combination of books and computers is great.
Her hand eye coordination is developed, and so is her basic understanding of technology.
Here are some wonderful learning websites for young kids.
Good for Beginners and very young kids:
My 5 year olds favorites learning/gaming websites:
http://pbskids.org/ - Educational games, videos and activities
http://tv.disney.go.com/playhouse/index.html Playhouse Disney
http://www.nickjr.com/ - formerly noggin.com, this website uses all your kids favorite TV characters (Dora, Diego, Kai-lan, Wonder Pets, Wow Wow Wubzy, etc.) to teach your child.
http://kids.nationalgeographic.com/ - anything by National Geographic is educational, but this is also fun and designed just for kids.
http://kids.discovery.com/ - similar to National Geographic, Discovery Kids, but not as deep.
Subscription learning websites worth the investment.
http://www.brainpop.com/ - Used by schools around the world, BrainPop receives over 6 million visitors each month. My 5 year old turned me on to it (her kindergarten teacher uses it to introduce new subjects in science, social studies, english, math, art, music, health and technology).
http://www.jumpstart.com/ - 3D virtual world where your child can create his own avatar and learn through the adventures on the site. Basic membership is free but once your child masters the basics, they'll be begging you for the upgrade. Not my favorite site but my 5 year old loves it.
Please comment if you have a kids website to recommend, or if you try any of these for the first time. Good luck.