I've decided to homeschool my kids. My son was in a similar situation at that age. He learned his alphabet, but he didn't know any sounds.
A month after he turned 4 yrs old, I had him watch Leap Frog Letter Factory (dvd). That DVD is awesome!! It teaches sounds in a fun way that kids love and makes it really easy for them to learn it. Two days after he watched it (he had watched it a few times by now), I thought I'd ask him to see if he had learned any of his sounds. He knew them all! I was shocked. So, definitely, definitely, definitely get that DVD. It really does an awesome job teaching the sounds.
Then, after that, we started with Hooked on Phonics Kindergarten bundle. You don't need to do their preschool bundle because all that does is teach sounds, and if you have the Leap Frog dvd, they already will know all their sounds. The bundle might seem like it's pricey, but you get a TON of stuff in it, and it's totally worth it. I really, really like Hooked on Phonics. It teaches the phonics, and then it has some memorizing words - ones that don't follow the phonics rules. It comes with a workbook that tells you everything to do and has lots of little books to read - which the workbook tells you when to read those books, etc.
My son has been reading for about six months now. For about 2-3 of those months, I had morning sickness and hardly did any reading with him because I just couldn't do it. Then I've been rather sporadic other days because I have my hands full with other little ones and being prego! Plus, he's only four, so it's not a big priority to me yet. On days that I do do reading with him, it's only maybe 10-15 minutes (I don't push him beyond his interest)...and with all of that, he's already into first grade level reading. He's 4.5 years old.
I can't say all kids will do that. My older daughter just simply wasn't interested until she was much older. But my son was quite interested, so I let him lead the way with his interest. Hooked on Phonics presents it in a really clear way.
I highly, highly, highly recommend Hooked on Phonics for teaching reading. Again, it might seem pricey, but be sure to look at the details of what you are actually getting, and it's not pricey at all.
I also follow up with Explode the Code books. They start with primer books (preschool) "Get Ready for the Code Books A & B" then "Go for the Code Book C". Then it's "Explode the Code Book 1" (that seems to be equivalent to kindergarten level). So, I start with the primer books and let them do whatever they are interested in and never push beyond their interest at this young age. This introduces letters again, as well as sounds, then writing, and reading. I don't push writing at age 4! too young. So I usually sit by him and have him tell me what to write. He just finished Book 1 and is ready for Book 2 (1st grade level). I have Hooked on Phonics be what they start with and what they are ahead in - and then I follow up with the Explode the Code books, so it kind of reviews it all again.
Hope that helps some!