The 'eggsplorers' earn golden eggs by completing activities. These can be spent on arcade games, accessories for their avatar, or furniture for their virtual house.
The site assumes no reading ability. It starts by introducing letters and sounds, for example first getting the child to click on an 'a' alone then getting them to pick the 'a' out of a line-up of three letters.
Animated characters like Matt the Ant, Sid the Kid and Jazz the Cat introduce new words and letters, frequently pausing to break into song and dance.
Other games include coloring in - where the colors to be used are marked in words - making monsters according to written instructions, and shooting tomato sauce onto fried eggs containing a certain word while avoiding others.
My three-and-a-half-year old daughter is a big fan of Reading Eggs and constantly surprises me with her newfound abilities.
She can't 'read' fluently but, for example, noticed that a certain recipe I was looking at contained the word 'green' (curry) and never fails to mention that 'the tunnel is open, Mum' when we drive the Graham Farmer Freeway.
Her biggest obstacle initially was a complete inability to use the mouse. For the first few months, she did Reading Eggs sitting on my lap. Her job was to be the 'pointer', pointing at the answer with her finger. My role was mouse operator or 'clicker'.
More recently, she has learned to use the mouse pad on our laptop and so can play independently, only asking for help if she gets stuck.
Children have to complete each lesson before moving onto the next one, which prevents them from going into an area they have no idea about and getting discouraged.
The website seems to use a combination of whole word and phonic approaches. It is used in some primary schools as part of their reading programme, and is designed for children aged four to eight.
In general, I think it strikes a good balance between fun and learning, with my daughter kicking me off the computer at every opportunity.
She usually does one or two lessons before playing in the virtual playroom, which offers free puzzles, dress-ups, virtual painting, animated nursery rhymes, and virtual ice-cream sundae making among other things.
At this stage my daughter is not that interested in spending her eggs, so her golden egg bank balance continues to rise to jealousy-inducing heights.
To adult eyes, the level of repetition can get a little boring.
Also, some of the illustrations and words are beyond children's everyday experience, for example a picture of a nun in traditional habit.
For those who care, the programme uses 'h' not 'haitch'.
The stories from Reading Eggs are also available in traditional book format from ABC shops and come with stickers and posters for motivation.