My daughters (one will be 7 this week and the other just turned 4) BOTH have leappads...and they are AWESOME! The youngest has the one for her age and it has really helped her to recognize letters and associate them with sounds...and the one that my oldest has has just been a godsend...I mean I don't homeschool and being a single mom, I don't have tons of time to sit with them so, not that I use leappads for a substitute, but they are a great help. I HIGHLY recommend the leappads for kids...HIGHLY.
I don't know what age children "should" be reading, but I do know that it varies by school district too. In NC, my daughter's kindergarten class never learned how to read...I worked with her at home, but the most they learned about up there was stuff like recognizing letters and numbers, but not reading.
Then when we moved here...it was a bit of a culture shock. Here they started to learn how to read in Kindergarten, so she ran into problems in the first grade not really knowing as much as the other kids....so, keep that in mind as well, that different schools have different curriculum....then again, you might homeschool, I don't know.
Anyway...good choice with the leappad....Have I mentioned yet that they are AWESOME!!?? :D