I think the LeapFrog Tag Junior Get Ready To Read system is brilliant. You can find it on Amazon or at Barnes and Noble. I started using this set of 6 books with my four year old, and she got the point almost immediately!
Titles are: Meg's Pet, The Jog, Us, Al Can, Dig It, and The Tub. These books are definitely for beginners. More advanced students would probably be bored. The stories in these books only include short vowel sounds. LeapFrog has more advanced options also. My husband actually uses the electronic tag pen with the books, but I just prefer to help my daughter sound out the words by herself.