I know better to get involved in a discussion like this, but I have seen both sides. First off, when talking about 3-4 year olds, I am not sure there is much you can do. At that age it is just another play activity and there is little hope of getting concepts across or even holding anyone's attention. The only time I would say or do anything is if I thought my child was being either a safety issue or a big distraction to the kids that are trying to pay attention and the coach was preoccupied with something else.
Now, for older, say middle school kids, I think this thread is discussing different scenarios, and I agree with the quote above that there are differences in parents yelling from the sidelines. In my opinion, there is a big difference to the parent that is constantly yelling negatives at the refs, coaches, and players and the one who is actively following the game, occasionally yelling compliments to the players or even an occasional constructive comment to their son/daughter. I am not talking about trying to be the coach. I think this is true in particular for rec sports, where there might only be one coach managing a team who can't possibly be seeing everything on the field. If you (as the parent) are familiar with the sport or have played it, I don't think there is anything wrong with the occasional, "DS, watch the far post! Look behind you! or You have time!" comment (as long as it is occasional). In fact, I have asked my son about this kind of thing and he has told me that this is helpful (again, being told something an assistant coach, if present, would certainly yell).
And, I think the rare, "Come on DS! or Block that guy! or Take your time - stop kicking the ball into people!" is okay to your kid, depending on the kid (a parent should know how their kid handles those comments). But, certainly nothing degrading and certainly far and few and mixed in with lots of, "Great pass! Nice tackle" or my favorite for a play that may not have been executed well, "Good thought!"
I personally cannot be the parent that just sits perfectly still. There are some parents that show-up (which is good), but do not even pay attention or know when their kid is playing. I am not saying that is bad, but that would be impossible for me.
Anyway, I am not saying one way is better or not, just that there are various degrees to parents yelling on the sidelines. Of course, I think we could all agree that a constant dialogue from a parent is extremely annoying. And, for the most part, I think it is best to remain quiet during a practice, unless there is a safety issue, or a distraction that the coach can not handle because he/she is preoccupied. My comments above are geared towards games being played by older kids.