Dear Aunt Debbie,
On brand-new babies:
We adore Lilly's Purple Plastic Purse (such a great book to address guilt over doing something mean and then regretting it), and read Julius, the Baby of the World soon after Isabel was born. However, we ran into the Bedtime for Frances problem: Eleanor started saying more negative things about Isabel as a consequence of reading the book than she had been on her own. We returned it to the library.
Another book you gave us in the same vein, with wonderful, realistic illustrations by Michael Emberly is Robie H. Harris's Hi New Baby!
Hi New Baby!
An older sister is less than thrilled by the appearance of her younger brother (the line Eleanor quoted from this one is "That baby is yucky!"), but quickly has some fond moments with him. One of the things I like about this one is that it's narrated by Dad, talking to the older sister in retrospect: remember when this happened?
Eleanor also really likes the book Rachel recommended in her comment, How to Be a Baby...By Me, the Big Sister. It contains some very funny lists.
On older sibling/younger sibling relationships:
As I've mentioned before, I love the treatment of sibling jealousy in A Birthday for Frances.
Rosemary Wells does siblings incredibly well. Two of our favorites (there are so many great ones) are Noisy Nora and Stanley and Rhoda (sadly, out of print).
Nora is the middle sibling, and spends the book watching her parents pay attention to her older sister and baby brother, then acting out in huge operatic ways ("First she banged the window/Then she felled some chairs/Then she took her brother's kite and flew it down the stairs!"). When all of the attention she gets is negative, she decides to run away, and everyone immediately misses her. Perhaps my favorite illustration here is Nora holding up a muffin pan in her little mouse hands, clearly about to drop it and make as much noise as she can.
Stanley and Rhoda
Stanley is a studious looking, responsible mouse, and Rhoda is his louder and far less responsible little sister. There are three stories in the book; our favorite is "Don't Touch it, Don't Look at It," in which Rhoda gets a bee sting and freaks out, while Stanley quietly calms her down.
I'll save the Max and Ruby books (NOT the ones connected with the TV show, blech) for another post. They deserve their own.
Finally, on a positive sibling note, I want to mention another gift from you:
David McPhail's drawings of the older sister and younger sister playing together and separately have a nice pencil-sketch feel to them, and his spare text describes two girls who you feel would be fun to hang out with. It's a good Here's how we're different/ Here's how we're alike book.