I second the idea about books if your children are very visual. DS6 learned to read by 2, and has spelled the vast majority of his words right since he started writing stories at 4. He was a "whole language" learner and never ever studied phonics, other than what he might catch on "Between the Lions." For visual learners, the link between reading and writing can be very strong.
If your children aren't visual learners and/or need more phonics, I strongly suggest readingeggs.com. My 2 year old occasionally plays that online reading game and LOVES it! They start with basic letter sounds (which you can skip over), and now he's connecting words and word families. For ex, yesterday he learned "it," and all the words in the word family that go with it. If your children are above that, you can set the level higher to their level. Once you hit lesson 60, they also have spelling games for this level. Mine is only at lesson 50, though, so we haven't been able to check that out yet. They also have worksheets tied to each lesson. The only problem is that you can only access the worksheet of the lesson you are currently on.
The program is designed to start at age 4-5, and I think there are 110 lessons now that go through 2nd grade level. I sent the info to my mom's elementary school, and the kindergartners there love it too.
