Originally Posted by kcab
A couple ideas that I haven't seen on here yet:

the Paddington books,

Magic School Bus - the original ones with the dense pictures (personally, I found these a pain to read...you may want to wait, but I know the kids liked them at that age and later),

Freddy the Pig books might be good (though, I haven't read a lot of them - they were a DH favorite at some point in time),

Doctor Doolittle books,

books of poetry - AA Milne's poem books are a good place to start,

Little Bear books (Minarik) (easy readers, but loved & lovely)

Oh, didn't read these to either kid at that age, and might be better for older, but keep an eye out for the Quigley series by Simon Mason.

We have an old series of books that are compilations of different types of stories (folk & fairy tales, nature tales, myths, etc). Those have been good to read and go back to over and again. Don't forget the 398.2 section in the library - lots of good folk and fairy tale books are shelved there (assuming Dewey Decimal system).

We loved the Frog and Toad books, and Owl at Home too. Obviously, talking animals are popular around here.

ETA: Oh yes, I agree, don't forget Beatrix Potter! (speaking of talking animals!)