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As with most things in this life, I rarely give a black/white answer :-)
So here are my *personal* thoughts on the matter:
The product is terrific and yes, it absolutely works. That said, I don't use it.
Here's why (bear with me to the end):
While I believe that reading is critical, I also believe that free-play is crucial to a child's development (especially ages 0-3 as their imaginations develop). I have always placed PCS books in my kids hands from birth more as TOYS at first...and later as learning tools for reading and comprehension.
BUT - I don't attempt to teach them to read from birth. Only to hold books right-side up (a developmental milestone), to feel and play with the pages, to chew on the books, etc. In 9 years no PCS has been destroyed (I made the first ones 9 years ago for my son - see my ABOUT page).
Once they hold and play with their books, they soon become captivated by the personal photos inside. They start to make up stories to go along with the photos (babbling at first, of course, yes, but that's all a part of the process of imaginative play).
Later, they WANT to know what the text says because they recognize that the story is about THEM (older readers obviously go through a different time line of events when reading a PCS book).
I do teach some reading early on, but in a very low key manner.
When my 2.5 year old asks me for cereal, I pull down the box and slide my fingers over the words and say clearly, "Mini Wheats!" The next time she asks for cereal, I pull down the box and point to the words and raise my eyebrows and ask, "What does this say?" She yells, "Mini Wheats!"
The next time, SHE tells ME what the box says.
It's now a relevant, fun, low key game we are playing. And she isn't just memorizing words but also grasps the concepts of what Mini Wheats ARE. I do this same thing all day long, at the grocery store, and so on.
Do I see value in the Your Baby Can Read products? Yes, I do. I also believe that any parent willing to spend such one-on-one time with their child will most likely help their child to read in a natural, less structured manner, still in time for Kindergarten.
All of this said, it's a personal choice. If you feel that your baby could benefit from learning to read before the age of 2, by all means - get the product line. Their price is amazing for everything they offer.
Or...if you are like me, use books and flashcards (laminated ones so they don't get destroyed) as infant toys at first (to stimulate imaginative play and an early appreciation for literacy) and then move into the memorization of the actual text later on - when their brains are more capable of grasping the meanings, feelings and emotions attached to those words.
And in the meantime - plenty of free-play, arts and crafts, running, jumping, swinging, laughing, dancing, singing and cuddling.
My 2 cents ;-)
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What do I think of the "Your Baby Can Read" products? 
