My DS is 6 but will be 7 in a few weeks. He is going into 1st grade (September birthday missed cutoff)
He devours chapter books, that is when someone else reads them to him ... He is immediately put off by so many words, so small on a page. It's why I regret waiting so long on VT - his confidence has suffered ... he's just beginning to realize he's getting better - that now that he is capable of more.
I keep my finger under each word as mine reads, as well...
I am thinking of getting him his books on CD (like you said for the vocab, grammer, etc) ... He'd have me read to him all the time if I could. He loves the Daniel X series by James Patterson and I just bought him one of the Danger Boy series.
