We've got lots of favourites too! One of the best tips I've been given is to make sure your child's books are at an accessible height to him/ her, so we have the book box on the floor, and DD (18 months) chooses whatever she would like to read at the time.

Some favourites are:
Get Busy This Summer (lots to point at and name in the illustrations)
Cows in the Kitchen (this one we borrowed from the library and she loved so much we had to buy it)
One Fish Two Fish Red Fish Blue Fish (she can repeat most of the words from the first bit)
Puppy Love (she is in love with dogs at the moment and this one has touchy feely fur etc)
Dorothy's Day (Dorothy from the Wiggles, not one of my favourites, though!)
Time For Bed (gorgeous pictures and she can name the animals)

Oh and a funny thing - I have a book I bring to church with us for her to read called Little One God Loves You. DH's family isn't religious, but the other day DD told MIL "God Loves You"!!! Made me feel like I'm a religious nutter that gets my child to repeat these phrases to convert people!! Very funny girl.