Lamport never recommended how one should pronounce LaTeX, but a lot of people pronounce it `Lay TeX' or perhaps `Lah TeX' (with TeX pronounced as the program itself; see the rules for TeX).
The `epsilon' in `LaTeX2e' is supposed to be suggestive of a small improvement over the old LaTeX 2.09. Nevertheless, most people pronounce the name as `LaTeX-two-ee'.