I found this freebie Teach Your Monster to Read while looking for something to help my daughter to start reading. It is a free program and is truly and awesome program.
This game teaches not only the letters of the alphabet, though it gives the child a opportunity to listen for the sounds and then spell words with it. They will be able to use these new skills in games to develop their speed, accuracy, and letter recognition. Once that is accomplished they will be able to use these new skills to practice reading.
I was really impressed by how the game reenforced everything and encourage them to really focus in order to be an achiever. I would highly recommend this for anyone starting to teach their kids reading.