I used this song in storytime today. I created large pictures of each "L" thing they mention, with the word written underneath, and the letter L highlighted. It's a fun way to learn vocabulary (linoleum, anyone?), letters and letter sounds, become more familiar with print, and just say some silly words. We sang it through once, looking at the words and pictures, and then I put on a cd of the song for us to sing again. I used the version on the For The Kids cd, performed by one of my favorite bands.
Now, I'm not going to pretend it was the best success ever, as I was having trouble going through the pictures quickly enough, but I do think the kids enjoyed the pictures and "la la las" and got the connection between the words and pictures. I will try it again!