Here's a rant I've repeated a few times now, so I thought I should post it someplace where I can link to it.
Books like Frog and Toad and Mr. Putter and Tabby are written especially for children who are learning to read on their own. They don't have any significant concept challenges, so readers can focus on decoding and fluency.* (I call those books junior fiction; most people call them "easy readers" which I think is demeaning to beginning readers who don't find them easy!) This category also includes abridged versions of classics, Magic Tree House, Nate the Great, Geronimo Stilton, Captain Underpants, Junie B. Jones and nearly all television or movie tie-ins.
As a media specialist, I suggest you save junior fiction for beginning readers to enjoy on their own. This has a few significant advantages. One is that these books sell themselves, so there's no need to read them aloud to get kids interested in them. Once they are hooked on a series, young readers will never lack books about familiar, comfortable characters, which encourages them to read more. Another is that you as the parent will never be stuck reading the forty thousandth Magic Tree House or Rainbow Fairy book aloud. Let your readers know they will be able to read them alone soon and this may be motivation for them. Third and most important, when you read aloud more complex chapter books, you have the opportunity to share some great literature (read: fun and interesting, not just "good for them") that your children otherwise would not discover on their own until many years later, if ever.
I enthusiastically recommend Toys Go Out and its sequel as great read-alouds for preschool and up. I love the Mercy Watson books too, but they qualify as junior fiction to me, so I prefer to recommend them as read-alones instead. In general, but not always, animal adventure stories are somewhat gentler than those about humans. Here, in no particular order, are some of my other favorites:
Jenny and the Cat Club by Esther Averill (many books in this series about a cat and her cat friends)
My Father's Dragon by Ruth Stiles Gannett (3 books - gentle adventure)
All About Sam by Lois Lowry (4 books)
The Magician's Boy by Susan Cooper (for those who love fairy tales)
The Puppy Sister by S.E. Hinton (a dog who wants to be a girl)
Stuart Little and Trumpet of the Swan by E.B. White (lesser known adventures by author of Charlotte's Web)
Mary on Horseback (historical fiction with some intense moments - less racist than Little House on the Prairie)
The Littles by John Peterson (several in this series, tiny people aka Borrowers except with tails)
Mary Poppins by P.L Travers (nothing like the movie, trust me - much weirder!)
Catwings by Ursula K. Leguin (cats with wings!)
Cricket in Times Square by George Selden (many books in series, some out of print)
Bunnicula (many in the series about the thoughtful dog and the vampire rabbit)
anything by Dick King-Smith - mostly animal stories
For those who want something a little sillier, try these -- very little children, however, may not get the jokes.
The Giggler Treatment by Roddy Doyle (about poo!)
Stuart's Cape by Sara Pennypacker (2 books)
The Legend of Spud Murphy by Eoin Colfer
Charlie and the Chocolate Factory by Roald Dahl (and its scary sequel, and really anything by him for kids)
Sideways Stories from Wayside School by Louis Sachar (3 books)
Finally, please don't stop reading picture books. Many are written for younger children, but others are much more complex and can bring incredible richness to your children's reading lives well into their middle school years. If you're looking for something longer than the average picture book, I suggest you try picture book biographies. Ask your librarian for recommendations.
For more on reading aloud, Jim Trelease is so amazing!! He just retired from doing workshops on read-alouds, and I think it's a darn shame. You can hear him here:http://www.trelease-on-reading.com/video_2.html and here: http://www.vimeo.com/2273440
* One caveat is that older books, such as Frog and Toad, may have concepts or words six or seven year old children may not be familiar with.