My youngest did learn phonics through a phonics program after only reading by sight words. She seems to understand it, but is a horrible speller.

I've just decided that this is an area she needs a little more help in and will try to come up with fun and creative ways to help her with it.

It's not a reflection of her intelligence at all. It's just the way she sorts info, I think. But because the school focuses so much on this skill, we will work on it together.

Here's a wiki link to phonics strategies:

http://en.wikipedia.org/wiki/List_of_phonics_programs

For the life of my I cannot remember the name of the program my daughter used but will post if I can find it.