I cracked up reading Amalah's review of kiddie books and had to leave her a comment listing my own faves:
"Go Dog Go" -- love the utopian party-in-a-tree ending and the iconoclastic fuck-your-hats attitude interwoven throughout.
"One Fish Two Fish Red Fish Blue Fish" -- the best Seuss. I always hated "Cat in the Asshat" -- he's an egotistical jerk and I would NOT like to have a beer with him, which is a requirement for protagonists of books I read aloud to my preshus offspring.
"Polka Bats and Octopus Slacks" -- works on so many levels, including mine. Drugs were probably involved in the creation of this book.
"Kat Kong," "Dogzilla" and anything else by Dav Pilkey (including the Captain Underpants series for the more sophisticated reader)
"The Velveteen Rabbit" -- Never had it as a kid myself; I read it for the first time when I was in my 30s. SOB SOB SOB SOB OMFG SOB!! More powerful antidepressants were immediately obtained.
...and I echo Amalah's love of Sandra Boynton board books. Boynton's humor, general sensibility and cute drawing style hit all the right notes. Some classics: "But Not the Hippopotamus," "The Going to Bed Book," "Snoozers" (with off-key parental tunes supplied), and "Blue Hat, Green Hat" (Sarah used to totally crack up at this). Inspirations and synergies with "One Fish Two Fish Red Fish Blue Fish" -- discuss!