My younger daughter who is 2 y4m, loves to read the 'Bubbles' series of books. She can identify with the context and loves to see Bubbles in different situations . This series of 12 books (available in Higgin Bothams) are such a hit with both my kids. She also likes 'Dora' series and books on animals.
My elder daughter, who is 7 1/2 years old, is beginning to experiment with different genres of books; Her favourite time is bed time for reading. From Roald Dahl, she has moved on big time to Enid Blyton. She has also picked up some children's books on environment; She also loves browsing through some of my magazines like Good House Keeping. Anyday, she loves those Barbie, snow white, Rapuntzel kind of books which end with 'And they lived happily everafter' and not surprisingly, Rapuntzel is already a hit with her sister!