I love flashcards and games for phonics, but I do not like how much space my materials take up in my office (especially while working in 2 schools and lugging them allover town...yuck!).
Here is my space-saving, technology integration solution to phonics flash cards: a powerpoint!!!
I use it on my iPad with "Keynote" (Apple's PowerPoint App-$10 in app store...totally worth it!) that opens ALL PowerPoint presentations. With this app I can quickly flash through the letters to test the students' letter naming automaticity.
Students think it so cool to have an iPad in class. If you can get your hands on an iPad it really helps to boost the class motivation. Otherwise a computer or projector work just fine.