POST: Help with off task behavior

Reading Groups -- They have a sentence to fix on the board
then they go get books to read while I teach a group. I
will be teaching AR next week and that might help but here
is what I see:

Students sitting too close and talk (we've modeled over
and over again where to sit and how close to be)
Students not really reading -- either pretending to or are
just sitting. I'm trying to conduct groups and it's
driving me crazy. As a whole they are very low and they
are the ones who need to be practicing the most yet they
are the most off task. In a way -- I'm sure that's the
problem. What can I do to help build their fluency and
decoding so that sitting and reading independently is more
of a joy then something to be avoided?

Reading Centers -- I allow them to talk to help each other
on their phonics page and with spelling in their journal.
Sometimes I wish I could do away with phonics pages
because many of my students can't read the sentences
independently anyway. The problem is -- they get off task
easily. Would I be a horrible teacher if I just did the
phonics page with them each day on the overhead and gave
them a chance to read the sentence independently then do
it with them? Some kids never get to their journal
because they are struggling with the worksheet. Also,
during this time I'm listening to my students read so I'm
not available to help.

We struggle with voice level and on task talking.....what
do I do to help them? Right now I feel like I'm nagging
and often I tell them it's a no talking time for a few
minutes then we try it again. It helps but I still feel
like I'm nagging all the time which makes it a negative
feeling for me -- and I'm sure my students!

Help please!