(Edited to add: I keep thinking of other activities we use, so I will add them as they come to me.)
I have been asked what I use to teach my children to read. In answering, I realize I have a short answer and a long answer. The short answer is that I use a combination of the Explode the Code workbooks and Alpha-Phonics. They are both books that teach straight phonics and I have yet to finish them with any child because we stop when they are actually reading. I also make a lot of use of easy readers as real books in conjunction with these. But, I realize, to stop there is not to tell the whole story. There is so much more that we do to encourage reading. I thought I would share some of the other non-workbook types of things we do, both to help give others ideas and to remind myself of all the different things I've done for when I get in a rut. I'm sure this will not be an exhaustive list, but it's a start.
So much of reading is based on knowing how language works and on having a large vocabulary. When I was first teaching M. to read, I was struck by how closely reading and vocabulary are tied together. English is not an easy language to read. (Think of the different pronunciations of thought, through, tough, and though as just one example!) As we worked on sounding out words, often we would come to a word and the letters did not make the "right" sound. She could tell me if what she said was actually a word or not and then we would play with the sounds until we hit on the sound that was actually a word. If a child does not know a great amount of words, there is no way he could even begin to tell if what he has sounded is a word or not. There are other things about words and reading that have to be in place as well. Some examples are: letter recognition, tracking left to right, rhyming, alliteration, and the understanding that stories are enjoyable and worth reading.
With that in mind, here are some of the things we've done to encourage reading readiness and foster a love of reading:
1. We read to our children. A lot. We start when they are babies and never stop. And we read a wide variety of books to them... fiction, non-fiction, poetry, magazine and newspaper articles, you name it. I think I have even read the cereal box to a child who wanted to know what it said. I recite poems to babies as I'm changing diapers and to older children as we work in the kitchen. We saturate our children with language and words.
2. We model reading for our children. Our children see J. and I read all the time and they hear us talk about what we've read. They observe that reading has value and purpose to adults, and children are drawn to practicing things that adults do. (Playing house, store, etc.)
3 Play rhyming games. This was particularly difficult for TM for a long, long time. He just could not hear the endings of words and consequently had no idea if they rhymed or not. (I imagine it is similar to how I cannot hear the different tones in Vietnamese.) Informally, I will ask if two words rhyme, or how many words rhyme with another word. This is where reading poetry, especially poetry which has a rhyme scheme is so useful.
4. Play alliteration games. Once again, informally ask how many words can you think of which start with a certain letter. Or, go through the alphabet matching to word to each letter. Both these and the rhyming games are great for when you are waiting in doctor's offices, restaurants, etc.
5. Have your child dictate a story to you. I will write it down, exactly as she tells it to me, and then I will have her illustrate it. All my children have loved reading from their very own books. We've even used these as Christmas gifts for grandparents. This is a particularly good activity for children who need work with sequencing. This was another skill which my adopted children have/had difficulty with.
6. Poetry puzzles. I will pick a poem and write it out on tag board and then cut the words apart. On the inside of a file folder I write out the poem again. The child then uses the written poem to put together the cut apart poem. (I first have the child memorize the poem.) This allows them to get used to matching the words to their meaning and encourages the act of poem memorization as well. (We have also done this with Bible verses.)
7. Play with letters. I have a great set of connecting metal letters which I absconded with from my parents' garage. (My father was a 1st grade and kindergarten teacher and I have acquired many of his materials.) I will have a child play with the letters and either practice spelling words he knows or make up his own words and have me (try) to pronounce them. It's a fun way to experiment with how letters combine to make words. (You could do this using any number of types of letters, I just happen to have some really cool ones.)
8. Make alphabet books. This is particularly popular with the preschool set as it involves cutting and glueing. Make a book out of blank paper, allowing one page for each letter of the alphabet. Then go through old magazines and have the child find pictures which he likes. Cut out the picture and then find the page where it should go. (A picture of an apple would go on the 'A' page.) We will often work on something like this over the course of several months, adding to it a little each day.
9. And what I consider to be my best motivation to learning to read... having older brothers and sisters who read all the time. Learning to read around here is often an act of self-defense. There are times when everyone who knows how to read is deeply involved in their own book and the only way to get a story read to you is to read it yourself.
10. Poster of sight words. I will often make a poster of words that one cannot sound out. Everytime my child and I are near the poster, I will ask him to read one or two of them... keeping them in a different order every time. We will also add words that caused difficulty to the poster as we come across them in our reading lessons.
11. Sequence cards. Have the child retell a story back to you and make an index card of each event. Then mix the cards up. The child can practice either reading the cards or putting them in order or both. The child could also illustrate each card to match the event.