-=> Quoting Charles Beams to Ruth Leblanc <=-
 RL> What would you rather do. Have the children try to spell a word
 RL> based on what they know or not write at all? Remember, again, here I am
 RL> talking about young children. By the time children reach grade four they
 RL> should be relying more and more on dictionaries, etc.
 CB> And herein lies our difference of opinion.  By the time children 
 CB> reach grade four, it is too late to begin formal spelling lessons - 
 CB> they have formed bad habits which are very difficult to break.  The 
 CB> mind-set that spelling a word badly is better than not using it at 
 CB> all has become learned and getting the students to write things 
 CB> correctly requires more inspiration than most teachers have to give.
In my kid's school they tend to call it "sounded out" spelling
rather than "invented spelling."  It appears to be an effective
tool for the practical teaching of phonics.  It also helps on
diagnosing kid's readiness for certain things - they tend to get
consonants mostly right pretty early, leaving vowels out.  Then
they start putting vowels in the right places, but random
guesses of which vowels to use.  Finally they enter a phase of
reasoned guesses.  But even the kindergartners are aware of the
distinction between sounded out spelling and dictionary
spelling, and  "best quality/final copy" work - commonly one or
two original stories for K-1's - must use dictionary spelling. 
By the end of third grade sounded out spelling is unacceptable,
and the kids know how to use dictionaries.  I think this
combination works well.
 
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