I used the IPA as an example that if one cannot auditorially discriminate sounds, one will have difficulty learning to read with phonics.
Do you use "Flash cards" or "Sound out" cards?
I was not a special ed teacher, but I am dubious of this distinction. If someone can understand the speech of others (ie--can hear and understand the teacher), there's no apparent reason, IMO, that they couldn't "sound out" words. I don't oppose including picture flash cards, but at the early stages of learning to read, the alphabet sounds and "sounding out" must be mastered--particularly with the average reader rather than a natural one. Even the natural reader ought to have these skills...he may someday want to learn Spanish or Russian.
With a phonics program, visuals are and should be included. Children should start reading simple phrases aloud immediately, and lots of coaching over unfamiliar words builds confidence and skills. Spelling drills and tests bore teachers, but they do not bore children as much as we'd like to believe (so that we'd then have an excuse to eliminate those drills and tests). Little stories with rhyming and alliteration are surprisingly effective. I do not believe reading education is mysterious ... but as RR said, what is simple is not necessarily easy.