This is a question I have a hard time answering. I realize that saying "nothing" is probably socially unacceptable, but its the truth, so I'm trying to work out an answer to this question so that I don't fail in future social encounters.
First of all, there really doesn't seem like there is anything to be 'done' in preschool. Reading books about preschool, I've learned that most (non-Montessori) preschools allow the children free time to choose activities such as dress up, building with blocks, doing artwork, a library area with books, etc. There is circle time, which can involve show and tell or storytime or learning songs or games. There is snack time and maybe some outside time on the playground. All this for two or three hours, three to five days a week for at least $200 a month (and Montessorians are laughing because Montessori is twice that). I'm not really sure why people send their kids to preschool, I imagine there are lots of reasons, including getting a break from the kids, socialization with a class of the children's peers, and perhaps for learning. However, I have to question if learning is the main reason anyone sends their child to preschool because kids learn just by living -- I'd even argue that they learn more outside of a classroom than inside it. For instance, why make a child who has known the alphabet for a year sit in circle time and review what the letter A is, what sound it makes, words that begin with A, etc? Perhaps there is a hierarchy of things parents what their children to know, the child who does not know the alphabet in preschool may not be interested in it for several years but might be captivated by nature and learn all about science that way..... Opps, I'm not supposed to be telling you why I homeschool, but what we're doing.
Nothing, we're doing nothing. When the 2 year-old naps, my 4 year-old and I read books together, if she's in the mood. The other day, we played Go Fish -- a couple of good games after we got past an initial argument when she told me I could not put down a pair from the hand I was dealt at the beginning of the game. It was interesting, because we didn't really talk about winning or losing, other than I noted that I won the first game because I wanted her to know the game was over since I had no cards. The second game, she got rid of all her cards first, she won and I noted it, but I don't think she gloated over it. When Daddy came home she told him about the game, noting that I won the first game and she won the second. Its funny to hear what your kids learn -- it was definitely significant to her because she reported it, she wasn't asked the outcome.
We cook sometimes, she helps me stir or measure and looks at the recipe with me.
She plays and tells stories. Once, she wrote a book (dictated to me which I wrote down).
The other day, I got four books from the library. The 4 year-old was holding two and her 2 year-old sister was holding two. My 4 year-old told me that they each had half. I was pretty impressed with that.
What are we doing? Nothing, but I've got to come up with a better answer than that.