I think Dr Suess and Berenstain bears early readers are GREAT. And you can supplement with youtube clips or dvds that read those books onscreen, or animate them, or even sing them (green eggs and ham is fantastic for memorisation and has several song renditions on youtube). These can be downloaded to dvd or converted to mp3 to go on a cd, although it might be illegal for some clips. There's free downloaders/converters on the web.
Phonics schemes are good, but due to limited words can be dull, so dont be a phonics-only person. Starfall has free black and white printable readers to go along with their free online phonics program. You can also buy the colour books if you want (even second-hand like Zaja did....see the thread where her 27month old is reading them.)
There's free readers at
http://www.progressivephonics.com/Buy readers at thrift shops, even if they are from different reading schemes. It's all practice and reinforcement. I love Jow Cowley readers. (popular in Australia/NZ). She takes a few words and makes a fun book you want to reread!!!
But you just cant beat those books with large words like "Spot!" books, and "Whose house" by Jeannette Rowe. There are heaps of those in thrift shops and garage sales.
But dont forget to read stories, so bub gets the idea about what reading is about, and develops that listening ear, and appreciation of poetry etc.