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Yes, you were one of the lucky ones. Studies show one-third of first grade students can memorize enough sight words to learn to read fairly well. However, the bottom third is handicapped for life. Some sort of reading Bell curve.

Comparative studies show phonics produces better readers in the long run, and yes, they can spell.

One study at Yale using MRI brain imaging techniques revealed that learning to sound out words results in more flow of blood to the brain. Readers who lacked the ability to sound out words had less blood flow to the language centers and in some cases, not much activity at all.

I saw one study comparing Open Court (phonics) with a well-known sight reading program which showed an increase in IQ of 5 - 10% for the kids that were taught phonics.

What is not clear to me is how learning to pronounce a word leads to a quicker understanding of its meaning, and, thus, would necessarily help a young student to read more quickly and with better comprehension. Standard English, certainly more so than Spanish, is almost a different language when spoken as compared to its written form. For example, consider he sentence, "I can buy tomatoes in a can". There is no difference between the verb and noun "can" as written, but when spoken in common dialect they are hardly recognizable as the same word. If I were to render that sentence phonetically, it would have to read "Ikin buy tomatoes in a can". How could one associate "kin" with "can" as used in the affirmative? Even more puzzling, when used in the negative, as in "I cannot buy tomatoes in a can", the verb "can" resumes its phonetic similarity with the noun "can". There are thousands of dissimilarities between written and spoken English that can be spotted with a sharp ear, all of which would retard a student who relies on phonetics. It seems that way to me at least.

They say that one one can read the New York Times knowing only 600 words; I would say that if we leave aside the jargon in the Sports and Financial sections that number drops to less than 400. That is all it takes to get a good start on the road to reading. 600 to 400 words is well within the most reluctant student's ability, and if we could only teach our students that much, that is to read the NYT (okay, I know the Times is a a piece of liberal fish-wrap) we would not be saying that 80% of our high school graduates are illiterate.