Hee, I was just coming to start this thread!
Our favourite - both mine and DD's - is called "
Each Peach Pear Plum". It's a fairy-tale/nursery-rhyme based book with very detailed pictures and each page is connected to the previous and next one.
"Each Peach Pear Plum, I spy Tom Thumb!" (Tom is hiding in a tree in an orchard)
"Tom Thumb in the cupboard, I spy Mother Hubbard!") (Tom is in plain view, next to a can of dog food that DD finds very exciting, and Mother Hubbard's bum is just visible at the edge of the page.)
...and so on. There is the slightly disturbing bit with Baby Bunting being shot out of a tree (in a basket/cradle) when the littlest of the Three Bears trips and his shotgun goes off, but later on that'll be a good discussion point for gun safety. (In case you're wondering, Baby Bunting is fine, floats peaceably down the stream until he is rescued by the Three Bears, who pick him up and take him off to eat pie with them and everyone else in the story. Don't worry, he looks to be over 6 months at this point.
Also Robin Hood does take a shot at the Wicked Witch with his arrows, but it looks like he misses. All in all, no imaginary characters were harmed by this book.)
We also really like "
And You Can Come Too" which is a cute story that is very GD-based. A little girl pushes her sister, her dad gently tells her not to, she hollers "you don't love me any more" and decides to run away. She packs more bags than she can carry, so she tells her little sister that she can come too, and when she gets to the back yard, her dad offers to make her a tent, and they end up spending the afternoon and evening together in the tent, reading stories and eating sandwiches, then the mom comes out with blankets and the whole family sleeps together in the tent. It's such a cute book, and DD likes it because the family dog and cat are hopping around everywhere.