I think the best for this age group is the Curious George collection. Now whenever a good friend has a new baby, I get them a copy of the hard cover Complete Curious George with the audio CD's included. I think young kids are sometimes more open to audio books if they have heard the stories read outloud before and/or if they can look at the book as well.
My oldest (who is now 8) used to stand in his learning tower in the kitchen turning the pages of the book while he listened to the CD's while I made breakfast. Now my girls (5 and 3) listen to them while they are going to sleep (they're on the Ipod now). The narration of these is excellent. Also the complete collection represents many many hours of stories--who knew these books were so long! They will last you for a while, and my kids really like to hear them over and over.
My kids have also really liked a lot of the barefoot books--Tales of Wisdom and Wonder and Animal Tales are probably our favorites. These are also beautifully read and my husband and I still look at each other once in a while and say "Misery, oh misery, Papa god, why you give me so much misery" which is a line from one of the stories in Tales of Wisdom and Wonder. These are the kind of stories that make you feel like a really good parent to have your kids listen to.
Your 5 year old would probably enjoy the Magic Treehouse books. My oldest two started listening to them at about 4 years old--and they both went through a very intense "Jack and Annie" phase. These are like nails on a chalkboard for me, but not offensive in any way--just annoying. My 3 year old can't sit still for them.
Also nails on a chalk board for me is Junie B Jones, but both my girls loved these for a while. I actually just deleted them off our computer and ipod because I decided they were a bad influence on the 3 year old--a little too mature and obnoxious, but they might not bother you as much.
Best of luck,
Jessi
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