I've read that very early readers are whole-word/sight word readers. My 2nd grader definitely had an intuition about phonics as he could read words he had never seen before. I think that once he sounded out a word once or maybe twice, he got it so he may have looked liked a whole-word reader but I don't think overall that he was. He wasn't a precociously early reader though - I think starting about 4yrs old.
My 2nd son, sounded out words like cat, hat and read his first Bob book at 2yrs3-6 months or so but he was definitely using phonics which I had not taught him.
So I think kids can intuitively get phonics w/out explicitly being taught even at young ages.
I've also read that pure sight readers hit a wall at some point (about 2nd grade or so) when the words get harder and more phonics is required. I think many kids don't hit this wall and intuitively grasp phonics early on.
