Alternative link for the second paper. This is a landmark paper cited by 53 other papers at the time of this writing.
Accordingly, theories of reading acquisition amply recognise the importance of phoneme awareness in the establishment of the reading system (e.g., Bradley & Bryant, 1983; Ehri, 1998; Harm & Seidenberg, 1999; Ziegler & Goswami, 2005).
This emphasizes the importance of phonics approach.
It is now widely acknowledged that the relationship between phoneme awareness and reading acquisition is strong (e.g., Ehri, 2005, for a review) and bi-directional : phoneme awareness develops with literacy instruction and in turn the development of phoneme awareness improves reading acquisition. However, several studies have shown a decreasing role of phoneme awareness on reading performance, together with an increasing role of other factors -- such as rapid naming (de Jong & Van Der Leij, 2003; Kirby, Parrila, & Pfeiffer, 2003) or morphological awareness (Casalis & Louis-Alexandre, 2000; Deacon & Kirby, 2004; Sénéchal & Kearnan, 2007; Singson, Mahony, & Mann, 2000) -- with age and reading improvement. These results suggest that phonological skills well account for individual differences in early decoding, but that, in addition to phonological skills, the development of fluent reading through increased orthographic knowledge might involve some other kind of cognitive skills. In line with this view, it has been shown that controlling for decoding skills does not exclude variability in orthographic knowledge (Barker, Torgesen, & Wagner, 1992; Olson, Wise, Conners, & Rack, 1990) and that early orthographic knowledge predicts later orthographic knowledge even after controlling for early decoding skills (Cunningham, Perry, Stanovich, & Share, 2002; Sprenger-Charolles, Siegel, Béchennec, & Serniclaes, 2003).
I take this statement as "sight word approach is useful, but has its limits as the kids grow older".
Some neuropsychological data also suggest that factors other than phonological skills could be involved in fluent reading acquisition. ... It follows that acquisition of whole word knowledge, allowing fluent reading, seems to rely only partly on decoding skills and phoneme awareness and probably involves additional cognitive skills not yet fully understood.
I take this statement as "phonics and sight word / whole word approach is not the entire story."
There's a very nice background / review in the first 5 pages of the paper. I'd suggest you read the paper.