I think it varies alot from child to child. Chinaberry catalog mentions "precocious listeners". My personal opinion is that 2nd children listen longer earlier because they tag along listening to their older siblings' books.
There are several books (often available in public libraries) that give age ranges for children's books as well as annotated descriptions of the stories. Ask the Children's Librarian at your local library for help -- they went to school for this sort of thing! Chinaberry catalog usual gives age ranges on their books, as do other catalogs...and usually they don't all agree, as it's a matter of personal opinion.
Don't overlook freeform storytelling. Dh is a master of this, and has entire casts of characters living in make-believe lands (this is where I got the name Queen Gwen, as I noticed she was modelled on me). It doesn't have to be that elaborate, though. I tell very simple stories that go through a typical day of the characters and let my 3yo contribute as she sees fit. I think this helps her use her imagination. Obviously, there are no pictures or visual aids involved. For us, this type of storytelling often occurs out at the swingset or in the car, etc.
Best bet is to just get books from the library, give it a whirl, see what the kids like.
BTW, I never used feltboard or puppets when I read a book...I'm so impressed that you do!