DS2 was obsessed with Starfall when he was learning his letter sounds, and now he likes the little phonetic readers and build-a-word programs in the extended subscription.
A series of leveled phonetic readers that we enjoy is called, "Now I'm Reading". They have full colour pictures that lend themselves to extending the basic storyline. We decode the text with DS and then elaborate on the stories to make them more interesting.
http://www.innovativekids.com/shop/230/learn-to-read-booksAnother activity that DS likes is drawing a picture or modelling a statue out of play dough and labeling the item, either with paper labels that I write or magnetic letters.
We also walk around the neighbourhood identifying items the first and last sounds in the words. It's a fun game with the bonus that it builds phonemic awareness and finding skills. We do a version of I-Spy on our neighbourhood walks where we give two clues, one of which is the first letter of the word.
I draw sheets of simple pictures and have him write out all or part of the corresponding word with magnetic letters. This is a prime way I've introduced word families and rhyming.
Another fun game is to place magnetic letters in a jar and draw them at random. Then, think of a word that starts or ends in that letter. We often make up songs that incorporate the words.
An alternative is to pick a theme, like trucks or dinosaurs, and run through the alphabet from start to finish thinking of an item in the class that corresponds to each letter. I'll write out the words or help DS type them on the computer. You might be surprised how well your LO can spell simply by sounding out the word slowly. I sure was! If you blank for a letter, make a new item up, act it out or paint it, etc.
I'd also try to keep up the pleasure reading as much as possible. IMO, everything should be secondary to developing a love of reading. You might like some books by Aliki or other authors in the Let's-Read-and-Find-Out series, which layer plots over non-fiction topics. Those books might serve as a gateway to greater enjoyment of fiction.
Also, just a though, but how advanced is the fiction you're covering? I find DS loses interest in fiction first when his comprehension jumps. You might want to try some longer stories, like Paddington Bear or James Herriot's animal tales, to see if a little more richness in plot does the trick.
