How do you teach DC'S the alphabet? Phonetically or not?

[ilikeyoursleeves]

My son (2.5 years) has recently taken a massive interest in learning numbers and letters. He is able to count to ten and recognise 0 - 10 by sight and identify them all correctly. He loves it when we write numbers down so he can tell us what they are. We haven't pushed him at all with this, he has developed this interest himself.

He is now getting into letters and keeps asking us what certain letters are. I have been saying things like 'aitch' for H, 'ess' for S etc but then my MIL (a teacher) says we should do it phonetically just now. But I am confused, he has a toy that says what the letters are called ('aitch' for Hat etc) so he hears that a lot, so wouldn't phonetics just confuse him?

I know I must sound all PFBish and pushy but I'm not, I'm just trying to figure out the easiest way for him to learn something that he is really interested in.

Any ideas?

ButterPie and others are right - you have to try hard to say the sounds properly, or else c-a-t is sounded as cuh-at-uh instead of cat. It takes a lot of effort to get it right (and lots of teachers still get it wrong).

My 19 m.o. loves his set of foam bath letters and has done since he was 13 m.o. We say 'That's letter h, it says hhhhhh', which was what I learnt on my PGCE. It's no different from saying 'that's a dog, it says woof'.

What DS actually says when he sees a letter is the sound, in the same way he said animal noises before he said their names. He knows pretty much all of them and enjoys spotting his favourites when out and about.

Again, I didn't set out to teach him particularly, I've just followed his interest.

Phonetically is the right way, and it will come into play when he starts to read, at the nursery he will be exposed to phonics, and learning sounds rather then letters.
Only when he knows all his sounds, names for those sounds will be introduced.
Children these days are thought to decode words rather then to learn by sight, which makes sense, learning to read if phonics and decoding was thought will be a breeze.