I teach a "Graduates Class" at my preschool. It's a weekly, one-hour lesson for our preschool graduates and other high level English readers and writers. The past couple of weeks I've been asking the students to go to starfall.com and just play around. Starfall is a online reading course that kids have so much fun on that they learn effortlessly. There are songs, flash movies, games, activities, and stories to read and write.
Starfall is designed for first graders, but can be used as a challenge for kindergarteners or as a review for second graders. There are four levels ranging from the alphabet all the way to folk tales and simple versions of Greek myths and Chinese fables. The web site is free and although there are products for sale, I didn't see any of the annoying pushiness that sometimes turns up on other free sites.
I am not associated with starfall in any way but if you have a child learning to read I suggest that you try turning him loose on the site.