What is the difference between phonological levels and book levels?

The Ooka Program consists of (1) reading levelled books and doing (2) phonological activities.

Reading levelled - 85 Books

The books used in reading range from the Kindergarten level to a Beginning grade 2 level. When presented with a book at the Emergent I and II levels, the child reads/listens to the story and then does comprehension questions and reads the story again. After the second reading, there are activities involving the development of “concept of word”. 
This concept is important so that one understands that what one sees in print is just spoken words written down. For an adult, this appears to be such a simple thing to grasp that you might assume that it would require very little teaching. Viewing it from a child’s perspective, however, it isn’t so simple. What a young child sees when looking at print is just streams of letters on a page, similar to speech, where there are streams of spoken words without pauses between them. Just telling a child that the words you have just written even if you point to each word as you say it, won’t be enough to make the concept of word firmly established knowledge for that child. It generally takes much more exposure to activities that highlight this concept before it is truly a solid base to build on. The Ooka Island program spends the necessary time at the beginning to ensure that concept of word is not just a general idea, but a true understanding of how spoken and written language is related. 
When a child has the concept firmly established, then a basic sight vocabulary starts to develop. In the Beginning and Fluency levels, the child becomes more fluent in reading and there is a deeper concentration on comprehension and vocabulary.

Phonological Activities – 24 levels

The phonological activities consist of 24 levels – these are not reading levels but the levels required to teach phonemic awareness and phonic skills. The 44 phonemes in the English language are taught in a very specific sequence starting with sounds that are easiest to hear and blend with other sounds. Then, building on the skills acquired with these easier sounds, the child is prepared to work through the more difficult ones. Practice with rhyming, hearing and recognizing single speech sounds, connecting sounds with letters, breaking syllables and words into their single sounds and blending sounds together, builds up the skills needed to be an efficient, capable reader. Using a focused, clear, systematic approach means that mastery of these underlying essential skills becomes possible so that reading becomes effortless as a child moves to challenging reading.