I have found very similar experiences to Judy when trying to remediate older pupils when it comes to spelling. I think they very much believe by this point that sounds are 'babyish' and I suspect that if they ask for spelling at school or home they are just told the letter names. I don't believe this helps struggling pupils to remember spellings. Those who have worked out the code for themselves can probably just write the word a few times and their strong visual memory and the kinaesthetic process of writing will probably be sufficient for them to remember the spelling but it won't work for our strugglers. These are the pupils who can't learn spelling but look, cover, write, check even if 'say' is included. They need to break up the word into individual phonemes/graphemes.
So, as Derrie says, this is where training and information comes in about when it is appropriate to use letter names and when to use sounds. As Debbie illustrated for us on Friday, when encountering unfamiliar words, adults write them down saying the sounds (or syllables) and choose a best fit spelling variation based on their knowledge of probabilities.
I agree with Dick that certainly many parents do teach letter names to pre-school children even if they also teach sounds of the alphabet. It would probably be a hard task to eradicate this but this doesn't mean we should include them in the early stages of an SP programme. It seems sensible to put all the focus into the important skills and knowledge and to explain to parents why we are doing this.
Dick, you may well be correct that if the children had been taught by a sound SP architecture from the start and consistently told to say the sounds (for both reading and spelling) it maybe wouldn't be a problem to teach names concurrently through an alphabet song. However, as dictionary skills etc aren't important at the early stages it seems sensible to me to leave it at least for a term and I would have no problem with it being left until Year 1. If there is even a chance of causing muddlement, it seems like a sensible thing to do to me.
With my older pupils I would expect them to know letter names and we use them for looking up words in the dictionary. I also don't really have a problem if they were to give me the letter names for a spelling variation of a particular sound eg i r for /er/ (although I try to just write the spelling or give a clue word).
For older pupils, I think the root of the problem is not them knowing the names but that they have been taught (or have somehow assumed through lack of explicit teaching) that saying the letter names is the way they should try and learn spellings.
I have a pupil who has worked through the whole SRS and has made great progress. However, he still makes the odd guess when reading which he can usually correct immediatley when I pull him up on it. When we are spelling I will remind him to say the sounds as he writes the graphemes and he will still mix letter sounds and names. Clearly this is not a positive strategy! It is a habit which he has fallen into and like the guessing habit, it seems to be very hard work to eradicate it.