Seriously, I'm as blown away as you are. I have seen some signs leading up to it, but when she picked up a book (Are You My Mother) and read it to me word-for-word I just couldn't quite believe it. I waited until J came home from work to see if she would do it for him. I picked a library book that we had only read once before. Same thing, reading along the lines with her little toddler finger tracing the words. Here are some things I attribute to her early reading (aside from my degree in elementary ed):
I have read books to her DAILY from the time we came home from the hospital.
I point out letters and words EVERYWHERE, signs while driving, cereal boxes at the grocery store, etc.
I let her pick the books at the library.
I take her to Storytime every week.
We play with words, sing songs, and pick out rhyming words.
We line up letters on the fridge, with her puzzles, and on paper.
I trace the words with my finger while reading.
I pick a word from each book to have her 'read' every time it appears.
(and No, I did not purchase that program. I oppose it on educational grounds. I also have not pushed her beyond her interest level.)
Apparently I have passed on my love of reading to my daughter (Success!). Now if only she had inherited my teeth...two years old and already a cavity =(