Your daughter sounds a lot like mine! Mine will be 3 in December and she's been doing some early reading for... gosh... six months or so now? I have struggled with ALL the same issues about what to do with her. SHe's my oldest so she doens't have older siblings to be jealous of but she knows anyway that there is stuff out there to learn and BY GOLLY she wants to KNOW IT! So i've been working on how to stimulate her and keep her enthusiasm going without overwhelming her or burning her out! It's a challange.
My advice would be to foster and go for whatever she's excited about. Workbooks, copying letters, whatever. and just understand that kids have "learning spurts" and plateaus and sometimes she'll be blasting through some words and loving it and other times she'll just stay at the same level for a while and focus more on play... and all of that is okay. That's all that has kept my sanity!
I use the target workbooks too. She LOVEs to do subtraction. Since she can't physically draw numbers yet and is still memorizing them (she did letters only for a long time and I kinda forgot to teach her her numbers :-S) I mostly just read the questions to her and let her answer. She loves that too. and a lot of times I let her hand hold the pencil with me and we draw the answer and then the page gets a sticker. SHe feels like she accomplishing something like a big kid.
I ALWAYS try to say that we're all done when she still wants to do more. I let her spend a decent amount of time on letters and reading short words and then when I think she's still really liking it but will probably get sick of it in about 5 minutes we quit and do math (simple naming numbers and addition and subtraction) and this she really loves so maybe I make her quit too soon but I usually tell her it's time to be done when she's probably good to go for like 10 more minutes. That way she's eager next time and never "tired of it" or ready to be done! I hope that helps. It's kinda an experiment. :-)
