There are so many great books that are enjoyable for young and old alike. It will of course depend on your and your child's proclivities, but our favorites over the years have included: The Wizard of Oz books (all 12 volumes, some of which are quite dark, except Ozma's birthday; blech); The Ramayana (seriously); Winnie the Pooh; Stuart Little; Narnia; Hobbit; Sherlock Holmes; Agatha Christie (we read 60 of these together after she turned 7; her favorite is The Body in the Library); Hugo Cabret; The Golden Compass; Sea of Trolls; Treasure Island; Tripods; Wrinkle in Time; Earthsea Trilogy; LOTR; Rumpole of the Bailey; James Thurber; Lemony Snicket (esp. All the Wrong Questions). In addition, she has her own favorites that she's read alone to herself over the years.
She also reads many graphic novels, which have greatly influenced her own storytelling and art. She has loved Amulet, Flight, Delilah Dirk, In Real Life, The Silver Six, Ghostopolis, Bad Island, Zita the Space Girl, Drama, Sisters, Smile, Rapunzel's Revenge, Bone.
For reading aloud, I especially recommend Sherlock Holmes, Agatha Christie, and other crime/mystery books with 19th-century decorum. They expose the crime, puzzles, characters, and social dynamics, while leaving the explicit sex and violence off stage. (She can of course ask about anything she likes.)
I hope people will respond with their favorite out-loud reading books.