I'm an Educational Consultant with Usborne Books, and until last year when the makers of Your Baby Can Read went Hollywood - LOL - I was selling this product. (They ended their relationship with Usborne, which was not the preference of Dr. Titzer, who created it. It was just a marketing decision, and I guess you can't fault them for wanting to make as much money as they can from it.)
Anyway, it really works with many kids! My caution to you is that it MUST be done informally! No matter what the parent suggestions say, I do NOT suggest putting the children in front of it for a certain amount of time each day. If I were using it, I'd just run it once a day and see who's interested in in. The children who are drawn to it will be the ones who are open to learn what it's teaching.
And don't use the flashcards for drill. That's just not an effective way that young children learn. This has to stay fun or it's not worth it. In fact, it can turn off a little child from wanting to learn to read at all! Keep it exciting, and make sure they're having a ball doing it.
The only other thing is to examine our motives. Some people want their children to read early so they can brag about them. But this isn't about US; it's about the little ones! Children learn at MUCH different paces, and although some pick up on things quickly, others may just not be ready. I would not even start showing the videos to a child until they were two. Babies may be able to learn to read, but they certainly don't have to! They can learn just as much by waiting, and that's the truth!
By the way, I am a teacher with an extensive background in Early Childhood Education. So I'm rather passionate about this topic, hence all the exclamation marks! :)
The fact that you took the time and effort to ask about this is a good sign that you want what's right for the children!
Your Baby Can Read is a good product. It has a long history of helping a lot of children, including many with special needs, to unlock the mystery of reading. As long as it's not misused, it can work wonders.
One last thing: experts have found that children need to hear 1,000 stories before they learn to read on their own. So the best thing any of us can do is to read to them, read to them, and read to them! One story a day will add up to 1,000 in just 3 years. And as they hear those stories, they start noticing common words and letters, and pretty soon it just happens - they're reading!
Good luck with your adventure. I very much admire you for having a home day care and being concerned about the education of the children you care for!