I asked this question about a year ago, and I'm still asking it (to myself.) I've done lots and lots of whole words, fast flash and slow, full sentences, fast and slow, sounding out, fridge magnets, flashcards, and hours and hours of reading dragging my finger along. I always follow my son's lead, he enjoys he's learning times with me, loves Little Reader and we use it for all kinds of stuff all the time, but he's not reading. Only occasionally showing me something amazing, but ask him to read any word and 99% of the time, he refuses or gives a silly answer. Worst of all he sometimes seems to really make and effort and he still can't read. He knows his phonics, he can blend when I sound out, he even sounds out correctly sometimes, but actually read a word? - no way! He read his first word out loud 2 years ago, and it was a word I didn't teach him (or even tell him once,) but these accidental readings are extremely rare.
So maybe he'll mysteriously start to read fantastically well sometime in the next couple of years, or maybe he'll just never be a strong reader, who knows? But I bet he's better off with all we've done so far (and what I plan on continuing) than what he would have been without it. Also, if I assume that he has not learned a thing about reading, he's learned a lot about language and many other things.
I very nicely asked him the other day, why he can't read and what I could do to help him learn (even though he's 2.5 years, he sometimes gives me good answers if I approach him in this way.) He plainly answered, "I can read Mama, I have a mouth... so I CAN read." Who am I to even question that?
Anyhow, answers I got last year were along these lines:
Your child already can read, she's just not showing it, maybe because she does not know it, maybe because she chooses to hide it (for the attention she gets when you're reading to her.)
Start on phonics.
Shift your attention to some other learning area.
Change to or supplement with other reading software and DVD's.
Don't focus on output, she's still very young, focus only on input, some kids just hate to be tested.
Something else that you brought to my attention is the breastfeeding. I also gave Wilhelm a sippy cup to drink from, then we'll do LR (between the age of 12 months to about 24), that kept him (I'm ashamed to say it) quiet and still so we could do a bunch of lessons in a row (math, music, extra LR bits.) This died out and I now enjoy having him an active learner instead. Maybe the relaxed receptive state of nursing (or sucking on a sippy cup) brings the association that reading (being read to) is a passive activity from their point of view, so they only receive but their response doesn't count, why do they ever have to respond then. This is the first time I think about it in this way - Yikes! Is that where I went wrong?