There is a lot of new research available online into the benefits of Early Years Intervention, Music and Literacy and the benefits of Music in the Nursery. The following selection I have found particularly informative:
Musical Training Influences Linguistic Abilities in 8-Year-Old Children
http://cercor.oxfordjournals.org/content/19/3/712.full
Music and the brain: three links to language
http://vesicle.nsi.edu/users/patel/Patel_OUP_Handbook_chapter_2009.pdf
Relating Pitch Awareness to Phonemic Awareness in Children: Implications for Tone-Deafness and Dyslexia
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3108552/
Benefits of Music and Movement for Children
http://www.musikgarten.org/music_movement.cfm
Implementing a Musical Program to Promote Preschool Children’s Vocabulary Development
http://ecrp.uiuc.edu/v8n1/galicia.html
The Effects of Singing and Chanting on the Reading Achievement and Attitudes of first graders. K.H.Cochran 2008
http://etd.lib.clemson.edu/documents/1220473778/umi-clemson-1814.pdf
The Effects of Music Instruction on Emergent Literacy Capacities among Preschool Children: A Literature Review
http://ecrp.uiuc.edu/v10n1/bolduc.html
Phonemic Awareness and Musical Pitch Discrimination: Related? A Strout 2004
http://cramer.myweb.uga.edu/6200/StudentSamples/PhonemicAwarenessMusicalDiscrim.pdf
Can Music be used to teach Reading? R.Butzlaff 2000
http://www.artsedsearch.org/summaries/can-music-be-used-to-teach-reading
Can Music Instruction Affect Children’s Cognitive Development? (Commentary on recent research)
http://www.ericdigests.org/2004-3/cognitive.html
The Impact of Music Therapy to Promote Positive Parenting and Child Development Jan M. Nicholson