lailag - when I mentioned kids getting upset at being behind, I was talking about when my eldest had been in reception class for about 4 months, some of his friends were finding it difficult and got upset. As I said, I didn't teach him before he went to school - just read lots to him.
Once he went to school (term before he was five which in his case was 4 and 11 months) he was obviously really ready because he lapped it up and loved memorising words etc. I think once they are ready they move along in leaps and bounds with a little encouragement. His school didn't teach the alphabet and neither did I - they went by the whole word approach and introduced phonics later, once they could read about 100 words. Before they even looked at a book they got a little paper pamphlet with their first 25 words in it. There were five words to a page and when they could read them all they got to colour in the picture on that page and move onto the next page. This worked really well. The first book they saw only had one word in, 'look', and I remember my eldest being quite disappointed that he knew 25 words and they gave him a book with only one of them in!
I took this same approach when I taught my younger son. I never did any alphabet work, just made a little pamphlet with some common words like the school had and he learned those. Then he started asking how to write other words and I added them to his pamphlet. For ages he carried this pamphlet with him (even to nursery) and showed people how he could read - but wasn't interested in reading from a book. Then suddenly he was interested when I picked a book up (after trying quite a few times) and he was off!
I started some reading schemes and read them through with him first, asking him to repeat the words after me, and he remembered them the second time we looked at the books. He's now learning phonetics at school (Jolly Phonics) and comes home doing the actions and sounds and at this stage it helps because if he doesn't remember a whole word and I point out the first letter, I can see him making the sound and the connection and then he remembers the word.
I didn't use the school scheme because I didn't want him to get bored at school and I thought the more books they read the more confident they will be. I don't think its good to rely on one scheme with one typeface because if they can read quite a lot of words on that scheme, they might find it difficult to read the same words in another book with a different type face.
I used a couple of old schemes - ladybird keywords, the old Peter and Jane books (which one loves and the other finds really boring!) and ladybird Puddle Lane (which they both love, I think because I read one page and they read the other so it feels like less work to them than ploughing through a book alone).
I think using the whole word method initially introduces them into reading books straight away and they see the benefit, whereas if you teach them the alphabet it can take a while before they see the point. Introducing the alphabet and phonetics later on, when they already know a lot of words, helps them when they forget a word they 'know' because they can try to spell it out and guess it and obviously it comes into its own when they are reading lots of words and come across new ones often.