Find a comfortable spot for both you and the children when you read to them. You don't want them to become fidgety or bored while you're reading. Try not to sit in front of any windows or areas with a lot of backlighting. It becomes tougher for the children to look at you for extended periods of time and can hurt their eyes.
Speak clearly and enunciate your words when you read. Don't mumble or skip over passages. You're essentially giving a performance to the children and want to make sure they understand what you're saying. In addition, alter your pacing and tone to reflect the emotions of the story. Reflect the personalities of the characters in your tone: Adopt a high-pitched voice for a princess or a low voice for an ogre. When a scary part comes, drop your voice to an ominous whisper and smile broadly when the heroes live happily ever after. It will engage the children in the story much more readily.
Show the book to the children while you read so that they can see any pictures clearly. Have the children sit in a semicircle while you sit on a chair, higher than they are. That allows everyone to see the pictures clearly, even if you have several rows of children. Slow your pace down to give everyone ample time to study the images before moving on.
Let the children participate in the process when they can. Allow your child to turn the pages. If you've read the book with the child before, have him repeat a specific line or phrase in the text. (Repeated words or rhymes work especially well.) If you haven't read the book, show him the cover before you start and ask him what he thinks the book is about. Talk about the book afterward if you have time and ask the child what he thought.