I'm quite confused about the whole thing. I can't remember how I was taught to read but can only presume it was 'look and say'. Generally my spelling is excellent and I can spell unusual words or names that I have only seen once. I also have a fairly large vocabulary.
Maybe I learn differently to other people, but if I'm reading something and come to an unfamiliar word, it doesn't matter how it sounds. It matters how to spell it and what it means. I don't understand why I would need to be able to pronounce it.
I understand that this is different for younger readers who are reading out loud, but presumably children already have a vocabulary of words that they know and understand and when learning to read initially they will mainly be reading words that they have heard before. Are they, therefore, using phonics to come up with a probable pronunciation then linking this to a word that they have heard before in order to work out the meaning? And using 'whole word' methods for the 'difficult words'. Which is actually just learning large, very specific an uncommon, phonemes (or whatever they're called)?
And I can't see how teaching phonics would help with spelling. But again, this is possibly because of how I think. It seems strange to me to spell words phonetically unless they are 'difficult words'. I spell all words the way they are in the dictionary, not the way the sounds break down. In phonics learning is a child expected to write down a word by breaking it down into sounds or do they learn spelling on a whole word basis?