God if I ask my DS1 (also 7) to sit and read with me he does "ok" - but by no means fabulous and seems to struggle with seemingly simple words, yet his reading book from school (and the books he's bringing home) say that he's doing well.
And when he picks up books and goes off and "reads" them on his own - and then I ask him what happened he's always manages to tell me pretty accurately (as well as most 7yr olds do LOL) what has happened.
when he reads to DS2 sometimes he "can't do it", and other times he whizzes through several books in one go.
Poor kid was probably bored!!!
FWIW - DS2 (4) can "read" some words too - he knows "yes" "no" "start" "select" and other such words.......well he knows what they look like and what they do on the computer/ps2 games - but can't actulaly "read" them per se.