My daughter is turning 5 next week, she has a shitload of books and her favorites are the Wizard of Oz series, I've been reading those to her almost nightly since she was 3.
She also likes the Shel Silverstein books like
Where the Sidewalk Ends.
I've got her on the I See Sam books right to learn to read (
http://www.iseesam.com/) I actually have my old set of those books from the early 70's that I used to learn to read myself.