Phonics can sound scary and far too technical, but actually it's quite easy.
Basically all phonics means is that instead of teaching the alphabet as letter names like "ay", "bee", "see", you teach the sounds they make i.e "ah" "buh" "cuh".
Just one warning, try and make the sounds as short as possible. Rather than "buh" like I wrote above it should really just be the very first "b" sound. Some of the sounds are tricky to do on their own, but even major TV programmes sometimes let the "uh" sound slip in, so don't worry too much, just try and keep them as short as you can.
Anyway, so why bother teaching things this way? Well, the idea is that once the kids have learned all the basic phonics sounds and the letters that describe them, they can then read a whole load of English, some say as much as 80%.
What about letters like "g" that can either be like "giraffe" or "golf"? The trick here is to realize that it's the sound that comes first, and the letter comes afterwards. The kids will already have the "giraffe" sound from "j". Luckily most consonants have one major sound that they produce most of the time, so it's best to start with that e.g. "c" for "card" not "circle".
There are lots of other posh names for different types of phonics teaching, but basically they are mainly variations on a theme. The point is that whether it's English for babies or for children as a second language, the kids are exposed to lots of sounds by listening and speaking first then you show them how we write them down. It's a bit like the Da Vinci Code for English!
You can have lots of fun with phonics, for example shout out a word and see who can touch the beginning sound's letter as quickly as possible. Or play a game of matching pairs, saying each sound as you turn the cards over.
Gestures can also be really fun and really help with visualizing the letters. Or even simple ideas like imagining the word "bed" as a real bed to remember the difference between b and d.
For more information on Phonics see...