Texican, I was thinking that before... reading teaches reading. I learned how to write and read from reading a lot. Then I learned everything else quickly because I had learned how to read quickly and understand all of it.
I can see the benefit of both whole word and phonics. You guys are right that one way doesn't work for everyone.
My brain sees a whole word and automatically breaks it into parts. That is how I can figure out the meaning of words in English and in some other languages. I think learning some Latin would benefit me, but I can see the roots and I understand the meaning of new words intuitively. (This was very useful in all my college science classes!) When I was learning Spanish, I kept coming up with all these connections between English and Spanish that my husband didn't even notice and he speaks both languages perfectly.

So, perhaps I will just keep reading to DD and we will work on learning some sight words and eventually learning some rules when she needs to sound out more advanced words.