Hi, great question! I am a former Early Childhood teacher and have a masters in Ed with a focus in early literacy, so for what it's worth, here's what i think:
My advice would be to steer clear of this program for several reasons. First, your instincts about not wanting your baby to watch TV are right on! TV watching actually changes brain wiring so that the brain develops to be more passive. With infants and very young children, even an "educational" program still has this effect.
Second, any TV watching takes time away from babies' most important developmental tasks- forming relationships with others and developing a positive sense of self. TV can NOT help babies do either of these things.
Third, there is absolutely no research to support this type of program. Even with "success", which in this case means getting a baby or toddler to read words off flashcards, this in no way predicts future school success. A toddler may indeed be able to decode or recognize sight words, but this does not mean that he/she will have improved reading comprehension. In other words, being able to read single words does not mean that the child will be able to read a story and understand what he/she has read. And after all, isn't that the point of reading?
This type of program may make it appear that a child is "ahead" of his/ her peers, but the gains are superficial, and offer no benefits that can't be taught at an age that is more developmentally appropriate. In other words, a baby who learns to read from a DVD is not necessarily going to be smarter, more creative, or more successful than a child who has rich early experiences and is taught to read at age 6 or 7.
Research shows again and again that young children learn best through play and through their relationships with others. The best thing we can offer our children, especially through the toddler and preschool years, is periods of uninterrupted, self-directed play time with developmentally appropriate materials. (for babies and toddlers, think simple: blocks, dolls, balls, animals, play scarves, anything that requires imagination to use)
The biggest predictor of reading success is whether or not the child has been read to and how many words have been spoken to the child in the early years. So..... read to your child, talk to her about the pictures, teach her new vocabulary words, let her see you reading for pleasure, take her on outings and talk to her about what she sees, play rhyming games with her, sing songs, do fingerplays, point out the letters of her name, let her draw, tell her stories from your imagination, tell her nursery rhymes, let her tell you stories, help her develop her imagination.
Children who have a rich imaginative life tend to be better readers because they can hold a picture of what they are reading in their minds. To help your daughter develop a rich imagination, steer clear of toys that do all the playing for the child (electronic toys) and keep toys simple (if your grandmother played with it, it's probably a good toy. well, except for the lead paint ;)). Avoid TV as much as you can (hard I know, but we put ours in the basement and it hardly ever gets used- out of sight out of mind I guess)
Sorry this is so long, but believe me, all of these things that you are probably already doing with your daughter are going to benefit her a LOT more than any DVD will, no matter what they promise!
Good luck!!!