I’m a second year PhD in the UK. This advice may not be relevant to you (for instance, it isn’t normal in the UK to take the courseload at PhD level that Americans have, we do research from the start, and have things like reading groups, rather than postgraduate courses).
I use Referencer to keep track of papers that I’ve read. I also have a big BiBTeX file with details of all the papers I need to cite, whether read or not. The ones that have been read have a comment above their BiBTeX entry, describing the work (this was from before Reference had the ability to add notes to entries, so you don’t need to do that now).
I learned very quickly to skim journal articles. There’s nothing more boring than reading papers all day. Mostly reading the introduction and conclusion will suffice, unless the work is very relevant, and you should know about it in some detail.
It’s impossible to read everything written about a particular subject. My second supervisor once gave me some good advice. Put the main topic of your thesis (if you know it), in the centre of a piece of paper, draw a circle around it. Then put the topic most closely related to it, and draw a circle around that (concentric circles). Keep going until you think you have enough. Every circle should have a decreasing number of papers that you read about that subject. Stop when you reach the outside. (Or just wait for your supervisor to instruct you to get on with some work, you lazy student!)
All my reading was done in the first year, as well. Now I just get on with work all day. My supervisor has the idea that all research should be done through writing papers. If you have a deadline to stick to, then it’s a lot easier to motivate yourself (seeing your name in print, and traveling to the conferences, are also good motivators).
Try to keep teaching to a minimum. It’s boring, hard work and invariably you figure something out just as you have to go and teach.
Also, it really helps to have some distractions, not related to your study!
HTH