Hopefully you are instilling the love to read in your children. We are slowly building a little library of children's books, and I always love to hear about others' favorites to add to our library. I often do this by ordering them through Better World Books.
It's nice, because I can often find children's books in great condition for $3.50 or less, and shipping is free!
The nice thing about this company is that every time you purchase a book, a portion of each sale is donated to literacy organizations AND a book is donated to charity!