Trill, lol that quote is used on the hothousing website. You raise some interesting points. Do you think that L has been disadvantaged because he was reading before school and is beyond his age level? Sounds like his teacher is catering to his needs quite well.
So what I am trying to say is, that you may well decide to teach him to read, but because of his age he will be unable to understand what he is reading or understand meanings simply because he still has the brain of a nearly 3yo and the hardwiring hasn't been laid down yet to allow him to understand it. Also this runs the risk of him learning to read by rote/memorisation and not really reading at all and that will present it's own set of problems once he reaches school.
This in entirely the opposite of what happened in my family - I was a 3 year old reader and was always years ahead with reading and comprehension, while my brother was left to learn at school and no one noticed that he was just repeating books by rote and couldn't actually read anything until he was about 8. My brother is the one sided gifted person - for logic based things I have never met anyone with his ability, but overall he was a poor student.

Mrsmac, actually DS is a complete dud when it comes to interaction with other kids. He just doesn't do it. I have no idea how to help that? Any suggestions? He starts kindy when he turns 3 in a couple of months and I am hoping he will start to communicate with his peers then? He is good at problem solving and very adaptive when things change and latches on to any adult attention, just nothing to do with children.

I think perhaps I overstated my intentions. By teaching him to read I meant didn't necessarily mean jumping straight into words - we are happy to do the fun activities and move along as he is ready. That is why I asked, I wasn't sure how to go about it. We had a look at the Reading Eggs website and he really enjoyed it - it was just about letters and phonics mostly. It is something that we can do one-on-one when DD is asleep and it is something that he really enjoys (ie tantrum when it is time to stop!)

Thanks for all the replies.