Children often advance rapidly as their intellect flowers. Look for books that match your child's age and intellectual level. Most children's books have the recommended age printed on the cover, and you can talk to your child's teacher for some good ideas as well. If you have an especially bright child, skew his reading list a little older. Specifically, look for books that the child can largely follow on his own but which have a few rough patches where he requires help. There should be one or two words on each page that he doesn't understand, but no more than that. Such books challenge your child to grow without making him bored or frustrated by reading it. If you think a given book may be too old for your child, consider reading it to him rather than letting him read it on his own.
Choosing books for your children means enticing them to read more on their own without prompting. You want them to think of reading as a fun activity, not a chore they have to endure. Accordingly, you should find books that excite and interest them. Pay attention to books in their existing collection that they particularly enjoy reading, and select similar books when making new purchases--those with the same authors, themes or characters. Talk to your kids if you don't know what interests them and ask them whether they might enjoy reading a particular new book. It's certainly OK to slip in something unexpected as well--a book you remember fondly from growing up or one that has won a number of awards.