Teaching basic words?!?

Garrett has recently been asking "What's this word?" or "Does this spell a word?" as he rattles off a list of letters. So I decided that while he is currently interested that we would start a few words and see where we go. I made him a few simple cards on a ring that have 2 letter words on them. We started with "to" and "go." Now in each story we read, when I come across one of those 2 words, he gets to read them. I have also asked him once in a while how to spell each word, just out loud. And I am planning on having him write the words when he writes his name and make sure that he knows which word is which. Then I think we will add a few more 2 letter words, so that he can start doing some of the reading. Tonight at the book fair he was so excited about finding a book that's title is "Go, Go, Go!" and believe it or not it is about Lighting McQueen and is a reading level 1 book. You bet, it came home with us! SO I'm trying to keep ahead of him!