DS loved books like Pamela Allen's Mr McGee books when learning to read (rhyming, repetitive). He would read the words he knew and we would read the rest. Even at 2 he was not interested in the early reader type books. We read books near his level, above his level, way above... He reads because he loves it, no rewards needed. He still loves to be read to, even though he reads fluently but I know he is reading along when we do. He taught himself though by reading whole words. Rather than getting your daughter to sound out words I would just tell her the word so she can keep reading and doesn't lose the sense of the phrase/sentence. DS is a perfectionist also and would skim read the line/page to check he knew all the words before reading aloud. We got him just to point to the words he didn't know as he got to them and we would read them. Enjoy the journey smile