The methods of teaching reading described in Flash Method and Multisensory Method involve presenting words to your child on cards, in books, or on the TV or computer. Taught in this way, children build up a vocabulary of "sight words" (whole words they can sight-read).
As a child's sight-word vocabulary grows, she may begin to intuit the rules of phonics. In any case, the child should be given phonics lessons as soon as she is old enough to understand the concept of letter sounds.
There is another method of teaching babies to read, however, that doesn't involve teaching whole words - at least, not explicitly.
In Native Reading: How To Teach Your Child To Read, Easily And Naturally, Before The Age Of Three, computational biologist Timothy Kailing describes how he used this method to teach his son and daughter to read by the age of two and three respectively.