I asked the question because I didn't do any phonics at school and feel very uneasy about helping him at home as I don't really understand decoding and blending references on mumsnet.
This thread is moving so fast that someone might alrteady have explained this, but:
Every single word in spoken English is made up of a series of 'sounds' (technically known as phonemes), from one sound words (a, I & eye) to words comprising many sounds.
Written English has evolved by using alphabet letters as a 'code' for each sound. As there are only 26 alphabet letters, which represent 23 sounds and there are about 44 sounds used in spoken English, some letters are combined to represent sounds. This encoding of sounds is complicated by the fact that historically English has absorbed many words from different languages and still uses the code of the originating language (which may differ from the code used by English at the time the words were absorbed). Consquently there are often a number of letter combinations which may represent the same sound (usually a vowel sound).
'Phonics' teaches the sounds of English and the letter, or letters, which represent each sound. With that knowledge children are able to 'sound out' (decode) each letter (or group of letters) in a word, then 'blend' the sounds together to produce the word they represent.
Good, systematic phonics teaching teaches children one way (usually the simplest) each sound is represented (simple code) and then goes on to teach the alternative ways that sounds can be represented. There are about 160 - 180 common ways of representing the phonemes of English.
As they learn, children are given texts on which to practice which use the code which they have already learned and the code they are learning. Some children are able to 'self teach' once they have the idea, many children need all of the code explicitly taught to them.
Learning the common ways that sounds are represented presents a far lighter cognitive load than trying to individually learn, as 'wholes', the 25,000 ish words which would make up a good reading vocabulary (which is actually physically impossible unless one has an exceptional memory). It also gives children the knowledge with which they can independently 'decode' any unfamilar word they come across.
Some people who have been taught by 'whole word' learning very often intuit the code for themselves and do become good readers. They may not even realise that they have done this and often tend to think that 'whole word' learning is fine because they can read OK. Sadly, at least 25% of children fail to learn very much at all by this method, apart from some simple words and the 45 HFWs that they have been flashcarded with since Reception!