I try to integrate music into my teaching as often as possible. I love this Phonics Song by KidsTV123. My class sings it everyday. One child gets to come up and point on the alphabet chart as we all sing along. This is much more engaging than flash cards. The kids always want to sing it again.
The kids also love Marching Around the Alphabet by Hap Palmer. We do this with letters and also with letter sounds.
Oh, and I just found this great DVD from heidisongs.com. There are songs (with movements) for each letter of the alphabet, as well as two songs that include all the letters and sounds. I'm going to have to buy it now!!