I like Read Write Inc. The teachers at dd2&3s' school gave an excellent demonstration of how the strands of reading, writing and spelling are woven together right from the beginning.
Children are taught how to say a sound, what the sound looks like, and how to form the sound along with a story which reinforces the formation. e.g 'm': "There was a little girl called Maisie, who wanted to climb a mountain. She looked down at her boots, looked up again and climbed over the mountain, but when she got to the other side there was another mountain, so she climbed that one too." This is then contacted to 'Maisie, mountain, mountain.'
They use 'Fred speak'to break down words into sounds (Fred is a frog who can't say words, he can only say sounds) and then when they are writing, children are encouraged to use their "Fred fingers" as they say a word, to identify how many sounds they should be using to write a word.
At DDs' school they set phonics across KS1 and have 30 or so groups of around 6-8 children. Every child's progress is monitored half termly by the phonics lead and the sets are reconfigured. Any lack of progress is investigated and intervention started if necessary.
Most children are off the phonics programme by year 2 and go on to the spelling programme.