Sorry for the long post! A friend of mine has a 3 year old who is starting to read. She knew my kids read at that age and wondered what reading program I used. As this thread is very similar, I've copied that email and pasted it below just in case anyone here is interested.......
My two older kids (now 10 and 13) learned to read by using the Dick and Jane books when they were 3 1/2 years old. They were ready to graduate on to regular children's books shortly after their 4th birthday.
The DJ stories use a controlled sight-word vocabulary, and each story introduces 1-3 new "high-frequency" words to memorize. Because the characters and illustrations remain constant throughout the stories, the kids can simply focus on the new words and not worry about keeping up with new characters or distracting pictures.
We never studied phonics formally, but as my kids got older we pointed out phonics rules. For example, the first word introduced in the DJ series is "Look". Once they knew that word well, they easily understood the concept that "oo" makes a certain sound and could apply that sound to new words such as "took". I'm not an expert on this, but a lot of what I've read indicates that gifted readers thrive with the sight-word method of reading instruction (assuming no learning disabilities are present) and can become bored with the slower and more systematic phonics approach.
I can understand why people would find this a bland series for 1st graders, but I think it's great for very young readers. My kids absolutely adored Dick and Jane and really wanted to meet them and play with them. After reading each story, they wanted to do the Dick and Jane activity featured in the story-- sort buttons, float a boat on a pond, sew a pillow, ride in a wagon, etc. The gentle innocence is very appealing to the 3 and 4 year old crowd.
Just in case you or anyone else is interested, here is how to use the books:
First, avoid the thin paperback reprints-- the stories are completely out of order so the vocabulary isn't presented in a logical way. Instead, use two anthologies-- The "Storybook Treasury of Dick and Jane" (yellow book) and "The World of Dick and Jane" (blue book). Each of the anthologies is a collection of 3 original reading books. To read the stories in their original order (as read by school kids in the 50s) follow these steps:
1. Blue Book-- "The New We Look and See" (1950s PrePrimer 1)
2. Yellow Book-- "The New We Work and Play" (1950s PrePrimer 2)
3. Blue Book-- "The New We Come and Go" (1950s PrePrimer 3)
4. Blue Book-- "Guess Who" (1950s Junior Primer)
(The stories are preceeded by the words "The New" because in the 1950s these were new versions of the original 1940s books).
In the 1950s, after reading the three PrePrimers, strong readers moved on to the Primer Book-- "Fun with Dick and Jane"-- while weaker readers read the Junior Primer "Guess Who" to review previously learned vocabulary and introduce some more words that would be encountered in the Primer.
The 1950s Primer, "Fun with Dick and Jane" is collectible and expensive and has not been reprinted in its entirety (the reprints with this name are not the same book). If you want to continue with Dick and Jane after "Guess Who", I recommend switching over to the 1962 series; the 1962 books are a lot easier to find and a lot less expensive than the 1950s series. The 1962 Primer book is called "Fun with our Friends" and it has a yellow and white cover (this is not the same book as the new reprint by the same name). My kids finished up their Dick and Jane adventures by reading "Fun with our Friends", but by this point they were strong readers and were reading other books as well.
A few more thoughts...
First, you may want to preview "Guess Who" and intersperse some of the beginning-of-the-book review stories at the appropriate times while reading PrePrimers 1, 2, and 3. The last few stories are a bit challenging; they are a good introduction to the reading level of the 1962 Primer "Fun with our Friends" which is more challenging than the 1950s Primer "Fun with Dick and Jane".
Second, when we used the books, I cut the pages off the spine and bound each of the two anthologies' three story books into three small separate books (giving me 6 thin soft-cover books instead of 2 thick hard-cover books). The big, fat anthology is challenging for a little child to hold, and the thin books are more like the original sized books kids used in the 1950s.
Third, you may wonder what to do with the remaining 2 story books in the yellow book ("We Look and See" and "We Come and Go"). The two remaining books are from the 1940s verson of the series (note they lack the words "The New" at the beginning of their titles). The 1940s illustrative style is slightly different and the vocabulary is presented in a different order than the 1950s series. You can ignore these two 1940s books or simply interperse the stories when appropriate. Many of the stories will simply be duplicates of the 1950s stories.
Finally, the reading series actually goes up to 6th grade. I own all the books (I enjoyed the reprints so much that I picked up Dick and Jane collecting as a hobby) and have used some of the stories from the 2nd - 4th grade books (1962 series) when my kids were in kindergarten. The characters of Dick and Jane only appear in the 1st grade books; the books for the older grades have an assortment of characters and stories.