Over at Jen Robinson's Book Page, there's a great post up on helping kids learn to read--lots of ideas from parents (including moi), teachers, and writers. Another point has just occurred to me, and I think it's important enough that it deserves a post of its own.
So often it seems like reading level is used as a measure in intelligence--"Oh, you're reading War and Peace and you're only 8! How smart you must be!" If you aren't reading "big books" at that age, it might then seem as though you are stupid. My second grader isn't stupid (ask him to explain String Theory, and he'll do fine), but there are many, many kids who are reading books considerably harder than the Magic Treehouse books he's plodding through. So I've made a point of explaining to him that each person's brain develops at its own pace, and in some people, different parts develop faster--some kids talk before they walk, some walk before they talk. I tell him he has a very well-developed math brain, and a great kindness brain (except for whacking his little brother), and tell him that in a few more years, when his brain has developed a bit more, no one will be able to guess that his classmates had ever read harder books than he was reading. I often remind him of what he was reading in past years, so he can fully realize he's making progress. Three December 31sts in a row, he's read A Fly Went By, by Mike McClintock. The first time through, it took three painful days. Next year, 25 minutes, reading out loud. This year, about 20, read to himself. So he can really see he's getting there.
Otherwise, I think it would be so easy for him to just think "I'm a bad reader." A self-fulfilling prophecy if there ever was one.