Remember the Golden Books that your parents read to you as a kid? You can't beat them for your own children. Try searching a used books store (like I did yesterday), and you will surely find a treasure. We have quite an extensive children's library here at home. New beautiful books are coming out all the time, but can you top The Poky Little Puppy or The Saggy Baggy Elephant. My daughter likes The Tawny Scrawny Lion.
Golden Books also has quite a collection of Bible stories and religious themed books. There are Children's Hymns, The 23rd Psalm, Noah's Ark and many more. Be sure to check these for accuracy. One of their most well-known God has some hints of evolution in the first few pages, so this isn't a blatant endorsement of all Golden Books.
Some of their newer releases are movie tie-ins for things like Bolt. I like to look for the older ones first (pre-1970's or so) because they usually contain moral lessons. In Arizona we have a used bookstore chain called Bookman's. While this chain can be quite quirky, they do have very organized sections (some of which you'll want to avoid), and a fabulous children's section. Whatever store is in your own community will probably have a plethora of children's literature. People discard those books from their homes as soon as children seem "older". How about saving their favorites for their grandchildren someday? However, this leaves a treasure trove for those who are trying to build a quality library. I picked up 4 Golden Books yesterday each for about 75 cents a piece. You can't beat that at Walmart!
Keep reading those good books to your kids, and stock on some for nieces, nephew and grandkids.