D.P.
My 4 year old loves the Tag reader that he got for Christmas last year from his grandparents. This year he asked for more books.
I also wanted to add that my son also learned to read with a game called Silly Sentences! It's really cute and doesn't cost much but my DS and I play it almost everyday. It's his favorite and we end up laughing hysterically at all the funny sentences we make. Plus it uses lots of sight words.
Like S.B. below we also have a word wall but I keep it in the living room. I bought it at Lakeshore Learning center which is a supply store for teachers & parents.
Have fun!