M.,
You didn't mention how old your daughter is? I think that makes a difference.
For my 6 yr old, we are new to spelling tests this year. So every night, while I make dinner she "studies" her words and tells me when she's ready. Then she gets a special notebook that has the "printing lines" on them. I read each word (while I cook), make a sentence of it, then wait for her to look up (to tell me she's ready for the next word). After she's done, I read each word again, to make sure she's got them all and happy with how she's written them (since the teacher explained letter formation is important too and that backward "b"s and "d"s change the spelling, so we've been focusing on that too).
Finally I "grade" her paper. We've been doing this every week night since she got the words.
I've also read another FUN way to do it is in the bathtub...let the kids write on the walls with those "soap crayons". We've done this type of thing too with a dry erase easel in our playroom. We've given her "sight words" to read each day and her Daddy quizzes her every night when he gets home to see if she "read" them during the day.
I hope this helps!