Out of curiosity, I had a look at Amy's homework today.
Apparently, they've gone beyond single words and are now writing (gasp!) entire sentences! Such fascinating, gripping novels as "Fu ruft Fara. Fara ruft Uta. Uta ruft Fu." (Foo [a sock puppet] calls Fara [another sock puppet]. Fara calls Uta [a girl]. Uta calls Foo.)
I guess your universe of discourse is necessarily rather limited if you've only got F U A R T to work with :)
I leafed through her workbook and looked at things with her.
At the beginning, there was a list of the children who would appear in the course of the book, and Amy surprised me by being able to read most of them (maybe two-thirds?)! Sure, it took a bit of laborious stringing-together of phonemes, but then she figured most of them out. (Even "Murat", which I'm not sure whether she has come across before.) She was even a bit proud of herself for being able to read names containing letters they hadn't "had" before, such as Ralf (no L yet, officially, yet she recognised it even in its lower-case form).
So basic to a literate adult, yet it felt pretty awesome to me to watch and hear her actually decoding the written word - words she hadn't read before!