I'm a student teacher and did my rounds in a prep grade last year where they used Letterland. I'm sure there is more to it than what I saw - the songs, activity sheets, I think there was a story for each letter. And they only did one letter a week, which I thought was a bit slow. In a one-on-one situation at home, I don't think you need that sort of equipment, it's nothing you can't make up yourself.
My Cait is almost five and has just started reading. I haven't done the literacy subjects yet at Uni, but we started a scrap book with a letter to each page and stuck in pictures and now she writes words on the pages for each letter. From my one child experience, she learnt what letters looked like first, starting with her name, and then what sounds they made. Just every day talking and going out and looking at signs and the junk mail ... and anything.
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