Sight words is the whole language approach to reading and does not address breaking down larger words such as ridiculous into parts that phonics does.
At school #1, my ds was given 10 dolche/sight words a week. The teachers also gave him a letter and phonics workbook. I also think they were doing some phonics work in class, which the teacher directed.
At school #2, the teachers told us that the sight words or the whole language approach to reading only goes so far and does not address breaking down multi-syllable words into parts. They advised us to go back and review sounds and phonics with books such as Bob books or other phonics based books.
You might try to pick up a copy of Jessie Wise and Sara Buffington's book, Ordinary Parent's Guide to Teaching Reading, at the library or elsewhere if you're working on phonics and breaking down parts of multi-syllable words.
I think one of the issues with whole language vs. phonics involves what type of learner your child is. Some people have an easier time breaking down parts into whole; others have an easier time seeing the whole rather than parts - visual spatial learners.
I agree that it's best to work on both whole language and phonics as well as daily practice.
