If you're looking for an online alternative to learning to read from flashcards and DVDs, then you'll like the phonics-based site, StarFall.com. I've been using the site to teach Maddy letters and letter-word association since she was just over a year old. But that is just the first step of the learning process. StarFall.com uses a "systematic phonics approach in conjunction with phonemic awareness" to teach all levels of learners.
Part 1: ABCs-learn letter sounds in isolation and in association with words and images. I use this section all the time with Maddy and I let her point and choose the letters. She loves the animal noises and funny little dancing characters.
Part 2: Learn to Read-learn vowel + consonant combinations in isolation and in context.
Part 3: It's Fun to Read-this section is great for early readers and kids who are struggling at their age level. Kids can listen to the story or click on words they don't know for pronunciation. Struggling readers can work to improve their reading ability in private or as an extra activity with the features on this site. Choose from stories about famous artists, classical musicians or have fun with tongue twisters.
Part 4: I'm Reading-your little readers will enjoy the variety of stories in this collection. From Greek Myths and Chinese Fables to Fiction and Non-Fiction stories, reading is not the only lesson they will learn. And if they come across a word they don't know, the click and listen feature is still there.
The website also features helpful guides for parents and teachers which was designed by a team of educators, artists, and musicians from around the world. The brains behind StarFall.com is the Polis-Shutz family, a husband-wife-son team who also co-founded the BlueMountain.com electronic greeting card company.