Learn Russian: Я прочитаю книгу с удовольствием.

It is in the Instrumental case because it follows the preposition с (with). The dictionary form is удовольствие, which is a neuter noun. To make it Instrumental, the final -е changes to -ем, giving us с удовольствием (with pleasure).

Прочитаю has a present tense ending. Why does it mean "I will read"?

The verb прочитать is a perfective verb, which means it describes a completed action. Perfective verbs do not have a present tense in Russian. When you conjugate them using normal present tense endings (like the -ю for я), they automatically talk about the future! So it specifically means "I will read and finish it."

Why is the word for book spelled книгу instead of книга?

Because the book is the direct object of the sentence—it is the thing that you are reading. This means it must be in the Accusative case. For feminine nouns ending in -а like книга, the ending changes to -у in this case.

How should I pronounce с удовольствием?

You should pronounce it smoothly as a single word: судовольствием. In Russian, single-consonant prepositions like с attach directly to the front of the next word without any pause.