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Here's my list of sophisticated/harder picture books:

Sophisticated Picture Books for Older Kids

The Raft�Jim LaMarche
Bartholomew and the Oobleck�Dr. Seuss
The 500 Hats of Bartholomew Cubbins�Dr. Seuss
Yertle the Turtle�Dr. Seuss
The Lorax�Dr. Seuss
The Country Bunny and the Little Gold Shoes�DuBose Heyward
Roxaboxen�Barbara Cooney
Miss Rumphius�Barbara Cooney
One Morning in Maine�Robert McCloskey
Time of Wonder�Robert McCloskey
The Wump World�Bill Peet
The Ant and the Elephant�Bill Peet
No Such Things�Bill Peet
(many other great Bill Peet books)
The Velveteen Rabbit�Margery Williams Bianco
Miss Nelson is Missing�Harry Allard
The Girl Who Loved Wild Horses�Paul Goble
The Egg Tree�Katherine Milhous
Alexander And The Terrible, Horrible, No Good, Very Bad Day�Judith Viorst
Holly and Ivy�Rumer Godden
Eloise�Kay Thompson
Cloudy With a Chance of Meatballs�Judi Barrett
Two Bad Ants�Chris Van Allsburg
The Polar Express--Chris Van Allsburg
Insects are My Life and Reptiles are My Life�Megan McDonald
Amos & Boris�William Steig
The 13 Clocks�James Thurber
Many Moons�James Thurber
Dr. Xargle's Book of Earthlets (and other Dr. Xargle books)--Jeanne Willis and Tony Ross
The Stinky Cheese Man--Jon Scieszka
Bently and Egg�William Joyce
Diary of a Worm (and others in series)�Doreen Cronin and Harry Bliss
Scaredy Squirrel (and others in series)�Melanie Watt
The Ticky-Tacky Doll�Cynthia Rylant
The Magic Schoolbus series�Joanna Cole
Three Days on a River in a Red Canoe

Teddy Robinson
Milly Molly Mandy

For high-end picture books, try this list: http://feryoutoview.blogspot.com/

The Fly Guy Series
Henry and Mudge

My 4 year old loves loves loves these!

I like that list, MegMeg! It does contain a number of books that are quite "young," though.

Mrs. Piggle-Wiggle

Agreed. It's a mixed list.

The Littles

We loved all of the longer Suess books.

Here are some of our favorite picture books.

Tiki Tiki Tembo (Arlene Mosel)
Skippyjon Jones (Judith Byron Shochner)
The complete tales of Winnie the Pooh (A.A. Milne)
The original Wizard of Oz (L Frank Baum)
Zen shorts (John J. Muth)
Doctor De soto (William Stieg)
Shrek (William Stieg)
Anatole (Eve Titus)
Amos and Boris (William Stieg)
Many moons (James Thurber)
Sylvester and the magic pebble (William Stieg)
Catwings (Ursula K. Le Guin) Not really a picture book, but read in one sitting.
James Herriot's Treasury of Inspirational Stories for Children
The Enormous Crocodile (Roald Dahl)

Here are the chapter books we have read together. I tried to remember the order we read them in. I am sure I am leaving some out.

My father's Dragon (Ruth Stiles Gannett) Kind of boring.
The Wind in the Willows (Kenneth Grahame) Loved.
Stuart Little (E.B. White) DD liked. It got kind of weird at the end.
Charlotte's Web (E.B. White) DD liked.
The 13 Clocks (James Thurbur) We started this one but quit because of talk of slitting throats.
The Trumpet of the Swan (E.B. White) DD liked.
Toys go Out series (Emily Jenkins) Mixed reviews. DD thought funny.
Abel's Island (William Stieg) Loved.
Dominic (William Stieg) Loved.
The Real Thief (William Stieg) Adsolutely Loved.
Harry Kitten and Tucker Mouse (George Seldon) Loved.
A Cricket in Times Square (George Seldon) Kind of boring.
Mr. Popper's Penguins (Richard and Florence Atwater) Really boring.
Fantastic Mr. Fox (Roald Dahl) Loved.
James and the Giant Peach (Roald Dahl) Favorite.
The Miraculous Journey of Edward Tulane (Kate Dicamillo) Loved.
The Rats of NIMH (Robert C. O'brien) Kind of boring. DD thought it dragged.
Charlie and the Chocolate Factory (Roald Dahl) Liked.
The Indian in the cupboard (Lynne Ried Banks) Liked.
The Mouse and the Motorcycle (Beverly Clearly) Kind of boring.
Bunnicula (Deborah Howe) Liked.
The Witches (Roald Dahl) Loved.
The Secret Garden (Frances Hodgson Burnett) Liked.
Alice in Wonderland (Lewis Carrol) Liked.
The Hobbit (J.R.R. Tolkien) Loved. Kind of dragged in parts IMO.

The only book we stopped because of violence was 13 clocks. I just did not like talking about executions with my then three-year-old. I might pull that one back out now, though. After reading and enjoying The Hobbit I think she could handle almost anything. But, DD4 is not really sensitive in that regard. She loves exciting and scary stories. Her very favorite stories are by Roald Dahl. I think they are kindred spirits. We did try to avoid books that were all about school and older children for a long time. DD loved stories about animals and fantasy so that was not too hard.

DS4 is very sensitive and picks up language (both good and bad) very quickly, so we have to be careful.

Lately he's fallen in love with the Mercy books by Kate DiCamillo. And we've moved on to the Bink and Gollie books by the same author. (These have fewer words on a page, but some sophisticated vocabulary.)