I have been teaching my oldest son to read with Anki and techniques recommended here on LessWrong as well as in Larry Sanger's post, and it's going great! I thought I'd pay it forward a bit by talking about the techniques I've been using.

Anki and songs for letter names and sounds

When he was a little under 2, he started learning letters from the alphabet song. We worked on learning the names and sounds of letters using the ABC song, plus the Letter Sounds song linked by Reading Bear. He loved the Letter Sounds song, so we listened to / watched that a lot; Reading Bear has some other resources that other kids might like better for learning letter names and sounds as well.