I was locked in that power struggle with one of my kids too. Now he's 11 and reads just fine. Back when he was learning, I knew that he knew more than he would let on, and I got so frustrated when he claimed that he couldn't. Especially when he would show off the things I couldn't get him to try for other people, like Grandma. Sometimes you just have to get out of the power struggle, make reading (or whatever else) attractive, and let it be their choice.

My son liked this online program he could do mostly by himself: http://www.starfall.com/