ICDL, the International Children's Digital Library located at http://en.childrenslibrary.org/ , contains about 4,000 books in 54 languages. Its bright colors, design appeal, and search ease make it child friendly. Though titles cannot be downloaded, they can be printed on paper and viewed by a variety of e-readers. Many of the titles were originally published in the 19th century, but more current titles are being added including over 800 that were published in 2006. This is a valuable site for teachers, librarians, parents, and, of course, children. Its definitely worth a look!
Other digital storehouses include:
Literature for Children: http://palmm.fcla.edu/juv
The Rosetta Project: http://www.childrensbooksonline.org/
Google Books: http://books.google.com/