Hi! I went through the same thing! Well almost! We were trying to teach our boys Chinese and what ended up happening at first(when they were 2-4) is they could say Chinese words well but they just raddled them off while playing and then they would make no sense at all and would be mixed in with English and whatever other words they were making up! I eventually realized the inevetible, there is not magic way to learn any language! However, don't give up! They are learning, it just doesn't seem like it right now. My sons now 6 and 8 are doing really well but just recently. They knew a lot more than I had previously thought. The best way to teach in my opinion is time with your child, playing games and having fun with the language, let them develop a love of the language and don't let them see that you are frustrated with them when they aren't getting it because they will only associate that feeling with the language.
Lots more fun ways to learn and stay motivated for parents teaching their kids a foreign language at my site.
http://mandarinkids.wordpress.com/