WordWorld

WordWorld is a cool resource from PBS, who have of late done quite a bit of web development to catch up with the BBC's excellent interactives. WordWorld is a pretty open-ended, exploratory site, so you would want to allow for a child-centered approach, but along the way, you will find some excellent reinforcement of letter identification, rhyming, and sound-letter connections. The concept behind the site, a companion to a PBS show, is the use of "WordThings," items which are composed of the letters of their words, with the letters being oriented, colored and textured to resemble the actual word. This would lead to a lot of great descriptive discussion about what the words/items look like, and perhaps an extension project (for older kids, perhaps) of creating your own WordThings.