We bought them the first three series of BOB books for Christmas. I actually learned about these books ages ago when a good friend recommended them to me for the older kids. Her child was a year ahead of my oldest and was doing well learning to read with them.
The great thing about these books is that once they know their basic letters and sounds, they can sound out the words in the Bob Books quite easily and then have the satisfaction of saying, "I read it all by myself!" It's so great to see the excited, proud look on their faces.
Now we play a game on the way to school every day: "How Do You Spell?" I say a word: rat, cat, pig, dog, and they sound out the word and try to spell it. I'm amazed at how quickly they're learning, how it's all just sort of bloomed wide open in the past year.