My son and I are both enjoying the Geronimo Stilton books.
Shadow Castle by Marian Cockrell.
It’s got goblins, elves, fairies, a dragon who drinks tea, and a couple of princesses.
Trust me. You won’t be sorry.
I loved Beatrix Potter stories as a kid (particularly A Tale of Two Bad Mice), and still do. I often buy a volume of her stories for friends as a baby gift.
I’m really drawn to Beatrix Potter stuff, too. I pass a Peter Rabbit Easter towel in the store and must buy it. About a year ago I found some adorable Beatrix Potter baby stuff in a store and almost went home and got pregnant. Yes, it really is that bad. My grandma made me a baby quilt with Beatrix Potter characters on it recently. She knows I don’t want kids. She just thought I should have it!
You can read the Grimm brother’s version here. It was also in *The Blue Fairy Book which is by John Jacobs, I think.
Let’s see.
Good Night Gorilla is perfect for the 18 months’ set. 10 Minutes Till Bedtime is great for four-year-olds; even very early readers can guess or read at the text themselves, and aren’t they proud! Plus the book is captivating as well, centering around the idea of hamsters taking a nighttime tour through a boy’s room.
We also read some Numeroff, like If You Give a Mouse a Cookie. Interesting cause and effect stuff. An absolute fave is David Shannon’s No, David! My youngest loves to chortle at David’s antics, and she can read most of the text without even sounding it out. The Miss Bindergarten books are wonderful too, and we read most everything by James Stevenson (especially the Grandpa & Wainy books, v. funny) and Robert Munch (Alligator Baby).
Burnt Toast on Davenport Street is great. So is the Zoom Trilogy by Tim Wynne-Jones; my 5-year-old is utterly bespelled by the originality of it.
We return to Dr. Seuss time and again, pretty much anything he wrote actually.
I’ve discovered and rediscovered so many children’s books for myself in the course of searching them out for my kids. Among my eldest daughter’s passions are A Series of Unfortunate Events, the Spiderwick Chronicles, and the Edge Chronicles. We are also reading Prince Caspian aloud. And of course all of us are crazy about the Harry Potter books.
Mrs. Furthur
Oh, I was going to say but forgot - when I had bedtime stories read to me the only one I’d allow is Marvin K. Mooney Will You Please Go Now!. It’s a less popular Dr. Seuss book. My dad would beg, please, can’t we read something else? But no. Only Marvin K. Mooney would do. I had a lot of other things read to me (and eventually I read for myself) during the day, but at night, only Marvin. Mom could read other things to me, but for Dad, nope, had to be Marvin. That poor, poor man.
And Marvin went. 
With a three-year old at home, I am rediscovering the joy that so many books brought me as a child, and learning of a lot of new authors in the process.
Maurice Sendak, Mercer Mayer, Leo Leonni, and Eric Carle all enjoy heavy rotation. Richard Scarry is in ascendancy. where lowly go? where lowly go? mind your manners, bananas.
Boynton, of course, is a real joy. Raymond Briggs. Kim Fernandes does some amazing 3d-effect artwork with clay, and the stories are a lot of fun too. Marc Brown and the original <i>Arthur</i> books.
I have found that I really don’t like Robert Munsch books anymore. Way too repetitive and formulaic (I know, they are kids books, but STILL).
The best part is, we go to the library almost every Saturday and pick up a fresh dozen…it will be years before we run out. 
We just got Peter and the Starcatchers, what do you think about it?
My sons are 3 and 5 and we just finished a Roald Dahl phase - both Charlie books, The BFG, James and the Giant Peach, The Minpins*, and The Magic Finger. They were (are) great. It is especially funny to hear your 3 year old refer to his dinner as scrumdiddlyumptious.
We are now working our way through the “Magic Tree House” series. Not (in my opinion) really that good but the boys like them.
My six and eight year old are waiting somewhat patiently for our turn at the eleventh book in An Unfortunate Series of Events by Lemony Snicket. It’s a bit mature in subject matter for ages under that, and probably even at their age. But they love these stories, and the language is not dumbed down. Others in my son’s favorites: The Mouse and the Motorcycle, Iron Giant, any Dr. Seuss, Lyle the Crocodile. I think the important thing is to let the child pick what to read, within reason. Both of my children have been read to every night since forever, and they both had the highest reading scores of their class. They love books on tape/CD, “stories in the dark” (stories told by mommy or daddy after lights out), etc. They even like to be told about the evils of smoking/tabacco, stealing (Mom has read them crime articles from the newspaper), discussing comparative religions, etc. I know it can be tough after a long day but the karma you are earning by encouraging this behavior in your child is priceless.