In regards to your question on a personal basis, I'm a reading specialist working with the lowest first graders on our campus. I work in the first grade classrooms that do Daily5/CAFE with their whole class. It is definitely the way to differentiate for all of your students. You can introduce strategies needed for specific student needs, insure that your students have "good fit books" on their level and confer with individuals and groups.
I hope this helps a bit, and also hope that others will chime in with their ideas. S Rea