Spell to Write and Read sounds perfect for your situation. And it has placement tests as well. However, it is labor intensive for the teacher.

no advice, but I would be interested to hear the answer to this question as well

sorry about the off topic post here... but I was just reading your signature and was wondering, what does CBS stand for?

nm my previous post... I found it.... it looks intriguing.. description says it's a supplement

I have not heard of it and I can't find it online. Can you provide a website link? What grades is it for?

We just purchased Spell to Write and Read. I haven't started using it yet, but from reading the instructors guide it is very clear that phonics here is used with a focus on learning spelling, as opposed to reading. Children do learn to read with this method, but it is as a result of having learned spelling. This will work very well for us I think because I have a child who can read already at about 3rd grade level, but he doesn't really know phonics beyond the basics that he's learned from websites like http://www.starfall.com, so trying to teach him to read using phonics at this point, would be hard, so we are learning phonics for the purpose of spelling with Spell to Write and Read and I'm hoping as a result his reading will improve as well. This method requires a extraordinary amount of teacher prep before you begin teaching, but from that point on prep time is really minimal, but of course with this method you are teaching the lessons as opposed to the kid learning independently like in ETC, so make sure you have the time for it before you decide doing it this way.