In which Annie (high school teacher, mother of two small girls and a baby boy) and her aunt Deborah (children's bookseller, mother of two young women in their 20s) discuss children's books and come up with annotated lists.

Early chapter books

Adventure books (many containing dragons):
the My Father's Dragon trilogy, by Ruth Stiles Gannet
My Father's Dragon (again)
the Doctor Dolittle books, by Hugh Lofting
Where the Mountain Meets the Moon, by Grace Lin
Half Magic, by Edward Eager
How to Train Your Dragon, by Cressida Cowell
The Spiderwick Chronicles, by Tony DiTerlizzi and Holly Black
Thomas and the Dragon Queen, by Shutta Crum 
The Marvelous Land of Oz, by L.Frank Baum
Ozma of Oz, by L.Frank Baum
Kenny and the Dragon, by Tony DiTerlizzi 
The Reluctant Dragon, by Kenneth Grahame
Raising Dragons, by Jerdine Nolan
The Wind on the Moon, by Eric Linklater
The Princess and the Goblin, by George Macdonald

Beach adventures:
The Paradise Trap, by Catherine Jinks
The Worry Week, by Anne Lindbergh

Biography:
The Who Was/Who Is? series

Books about kids:
Anna Hibiscus, by Atinuke 
(more on Anna Hibiscus at this link)
The Riverside Kids books (starting with Busybody Nora), by Johanna Hurwitz
The Jamie and Angus Stories, by Anne Fine
The Sophie books, by Dick King-Smith 
Lulu and the Brontosaurus, by Judith Viorst 
The Stories Julian Tells, by Ann Cameron 
Clementine, by Sara Pennypacker  
The Boxcar Children, by Gertrude Chandler Warner
Molly McIntire books, by Valerie Tripp (American Girl)
Addy Walker books, by Connie Porter (American Girl)
More on the American Girl series
The Stink series, by Megan McDonald (Annie's take on the first book)
Mrs. Piggle-Wiggle, by Betty MacDonald (Deborah's take) (Annie's take)
The Amazing World of Stuart, by Sara Pennypacker
The Pet Trouble series, by Tui Sutherland

Books about animals:
Martin's Mice, by Dick King-Smith
Three Terrible Trins, by Dick King-Smith
The Mouse and the Motorcycle, by Beverly Cleary 
Mr. Popper's Penguins, by Richard and Florence Atwater
The Wind in the Willows, by Kenneth Grahame (abridged and illustrated by Inga Moore)
Charlotte's Web, by E.B. White (more on it here)
How to Scratch a Wombat, by Jackie French (nonfiction)
The Trumpet of the Swan, by E.B. White 
The Cricket in Times Square, by George Selden
The Pet Trouble series, by Tui Sutherland

Books about toys:
Toys Go Out, by Emily Jenkins
Winnie the Pooh, by A.A. Milne 

Books that deal with death:
Charlotte's Web, by E.B. White
Stink: The Incredible Shrinking Kid (death of a newt)

Chapter books that look like picture books ("read-aloud" versions):
The Wizard of Oz, by L. Frank Baum, ill. Charles Santore
Snow White, by Charles Santore
Fantastic Mr. Fox, by Roald Dahl
Charlie and the Chocolate Factory, by Roald Dahl
James and the Giant Peach, by Roald Dahl
Peter Pan, by J.M. Barrie
The Classic Tales of Brer Rabbit, by Joel Chandler Harris
The Classic Treasury of Aesop's Fables, ill. Don Daily

Early chapter books for slightly older kids:
Ramona the Pest , by Beverly Cleary (and other Ramona books, of course)

Fairy Tales:
The Fairy's Return by Gail Carson Levine
Shakespeare's Storybook: Folk Tales that Inspired the Bard

Graphic novels:
Advice on reading graphic novels aloud
The Bone series, by Jeff Smith
Zita the Spacegirl, by Ben Hatke
Tales from Shakespeare, by Marcia Williams
Guinea Pig, Pet Shop Private Eye, by Colleen AF Venable and Stephanie Yue
Fairy Tale Comics: Classic Tales told by Extraordinary Cartoonists, ed. Chris Duffy

Historical series:
Molly McIntire books, by Valerie Tripp (American Girl)
Addy Walker books, by Connie Porter (American Girl)
More on the American Girl series
What Was... series
"My Name is America" (fictional diaries of boys)
"I Survived" series, by Lauren Tarshis
"You Choose: An Interactive History Adventure" series
The Magic Treehouse series, by Mary Pope Osborne

Mystery:
Ottoline and the Yellow Cat, by Chris Riddell
Ottoline Goes to School, by Chris Riddell
the Nancy Drew series, by Carolyn Keene
the Encyclopedia Brown mysteries, by Donald J. Sobel
the Meg Mackintosh series, by Lucinda Landon
the "Get a Clue" series, by Julian Press
Nate the Great, by Marjorie Weinman Sharmat
the Jigsaw Jones series, by James Preller
Guinea Pig, Pet Shop Private Eye, by Colleen AF Venable and Stephanie Yue

Poetry:
When We Were Very Young, by A.A. Milne
Now We Are Six, by A.A. Milne

Politics:
Bad Kitty Runs for President, by Nick Bruel

Really good abridged versions of  books for older kids:
The Wizard of Oz, by L. Frank Baum (abridged, Santore illustrations)
Peter Pan, by J.M. Barrie (abridged, Classic Starts version) 
The Wind in the Willows, by Kenneth Grahame (abridged and illustrated by Inga Moore)
Merlin and the Making of a King (by Margaret Hodges, illus. Trina Schart Hyman)
Tales from Shakespeare, by Tina Packer 
The Winter's Tale, retold by Bruce Coville