I can't help you with the specifics, but I do have a suggestion: look into how people learned how to read pre-mass literacy via the school system. Before 19XX, a sizable portion of people learning to read were adults. You might be able to glean some ideas from their experiences.
I remember when learning how the read was getting down letter sounds then syllables. Then trying to picture the words as you sound them out.
I think for some of the beginning basics you need more than a book to translate the written into the appropriate sounds, etc. Once you can get a handle on that it get easier.
Another tool to employ is to get them to learn the most common words (i,e, http://en.wikipedia.org/wiki/Dolch_Word_List ) that will help them trough most words in sentences...
How about "graphic novels". Perhaps pick some comic books young boys would read more than once. I've puzzled over some Dutch ones for years and heard of others using them to learn a language.
Tangential question, but: can anyone here remember learning how to read?
I've never thought about it before, but... I don't remember at all what it was like to learn to read! There's a big blank spot in my head for kindergarten, and then I remember reading some spooky children's books in first grade, but I have no idea how I came to acquire that ability.
So does anyone remember how you picked up your ability to read? If so, which learning techniques were effective for you? Maybe there's a way to transfer those techniques into book form.
Although I wonder whether it's even possible to learn to read just by looking at squiggles on paper. At the very least, it seems like there would have to be text + images. But how do you print out a sequence of text + images which somehow teaches the reader the meaning of that text? There's so much to cover: the alphabet, then the individual words, then the meaning of particular word combinations...
It almost seems like going to school would be the most effective way for them to learn, because they'd be learning from someone and they'd be able to ask questions when they get frustrated.