Free Homeschool Phonics/Reading Books

Reading Made Easy With Blend Phonics
Word Mastery: a course in phonics for the first three grades
Stairway to Reading
Through the Phonics Barrier 
First Lessons in Reading
American Spelling Book by Noah Webster - Teaches reading and spelling at the same time!

Rebecca Pollard Materials

A Complete Manual: Pollard's Synthetic Method of Reading and Spelling
First Book for Little Folks   (a combined version of all the 1st year work)
Synthetic Primer
Synthetic First Reader
Synthetic Second Reader
Synthetic Third Reader 
Advanced Reader

Synthetic Speller
Synthetic Advanced Speller

Elizabeth Burnz Materials

The Step-by-Step Primer
Pure Phonics for Home and Kindergarten
The Spelling Reformer
Student Progress Chart by Don Potter

Free Homeschool Readers

McGuffey's Readers

The Eclectic Manual of Methods for the Assistance of Teachers
Old Favorites from the McGuffey Readers (1-6) - useful when deciding where to place your child in the McGuffey's Readers. 
McGuffey's Eclectic Primer
McGuffey's Eclectic First Reader
McGuffey's Eclectic Second Reader
McGuffey's Eclectic Third Reader
McGuffey's Fourth Reader
McGuffey's Eclectic Fifth Reader
McGuffey's Eclectic Sixth Reader
McGuffey's Eclectic High School Reader
McGuffey's Eclectic Spelling Book 

Treadwell Readers

Primary reading and literature : a manual for teachers to accompany the primer, first and second readers of the reading-literature series
Reading-Literature Primer
Reading-Literature First Reader
Reading-Literature Second Reader
Reading-Literature Third Reader
Reading-Literature Fourth Reader
Reading-Literature Fifth Reader
Reading-Literature Sixth Reader
Reading-Literature Seventh Reader

Other Readers

A Primary Reader: Old Time Stories, Fairy Tales, and Myths Retold by Children 
Everyday Classics First Reader