I think alot of people have different ideas of the definition of when a child is reading.
I might have been stingy, but I didn't consider my DD to be reading when she was "reading" the books she had memorized, or any little sight-word primers and things, but when you handed her something she had never seen and could read most or all of the words, stop at words she didn't know and try and sound them out. Or when she started reading streets signs, ceral boxes and things. It's sort of the wild spill-out after the breaking of the code.
Memorizing the basic sight words, knowing all the letters and their sounds, learning the rules of phonics and exceptions and all the many letter blends, reading alot and being read to (a combination of breaking down new words and re-reading familiar text for fluency) is the best way to become a solid reader I think...it happens over time at different stages.
All IMHO, of course.
