Here is my favorite resource for teaching your young child the sounds the letters make, and how to write them! Begin with 3 primer workbooks that open horizontally to a clean, bright format with simple line drawings done by children. This set of Explode the Code Primers (A, B, C) teaches all the consonant letters thoroughly with a whopping 12 pages of fun activities for each letter. The most fun is the riddle page. Mom reads the riddles (found in the Teacher's Manual, or create your own) while the child follows instructions carefully. For example, after learning the letter "f" (how to write it, its sound, and its capital letter) the first riddle says: "I am thinking of something that is often made of wood. It keeps animals in a yard or field. What is it?" Now the child looks at all the drawings on his page and finds the fence. "What sound does fence begin with? ("ffff"). Color the fence green." Each object that the child finds to answer the riddle has a different direction with it, such as put an X on it, or color it red and yellow, etc.
Move on to more challenges: Book 1 teaches short vowel sounds Book 2 teaches consonant blends Book 3 teaches the phonic units sh, th, wh, ch, ng, ck, tch, ee, ea, ai, ay, oa, and ow. Book 4 covers compound words, suffixes, syllable division rules, and 3-syllable words. Book 5 teaches the sound families: all, alk, old, olt, oll, ild, ind, thr, shr, scr, str, spr, spl, qu, -ey words, and the sounds of ed. Book 6 contains ar, or, er, ir, ur, wor, war, ea, ie, igh, oo, oi, oy, ou, ow, au, aw, ew, ui, ue, ou. Book 7 covers soft c and g, silent letters, ear, ph, ei, eigh. Book 8 teaches suffixes and endings.
If you feel your child needs a little more practice at a certain level, each level has a "1/2" book: 1 1/2, 2 1/2, etc. that provides more practice on the same concepts as the book before it So, if your child finishes Book 2 and isn't really confident with the concepts, let him do Book 2 1/2 and he'll be ready for Book 3.
I would recommend moving forward just as quickly as your child can handle it. (It never hurts to tape a dollar bill inside the cover as a motivation!) As soon as your child has gone through the primer books, and done a few pages in Book 1, he will be able to read a beginning phonetic book, like Decodable Little Books. Paperback, 78 pages per book. You'll love these!