In her excellent, thought-provoking post, Misrule discusses the state of the children's novel.
Obviously I must admit to some bias here. But deep down, I believe that the perfect children's novel is perhaps the highest work of art to which the writer can aspire. It's even possible to argue that the children's novel can discuss bigger, (purer?) issues than the YA novel, because it's not yet caught up in all the messy, personal business of identity formation and burgeoning sexuality. The children's novel routinely deals with death and grief and love and pain, and the deep delight of being alive.
The really good children's novel plants seeds in the rich and hungry soil of a child's imagination. The really good children's novel is a uniquely satisfying reading experience.
Off the top of my head (by no means an exhaustive list, but from a quick scan of my book shelf), here are some the children's novels that 'built' me - not just as a child, but as an adult reader:
And I've left off heaps of books that I loved, and still love -- these are just a handful of the books that I think offer some special nourishment to the reader - a taste of philosophy, an introduction to ethics, a poetry of language, a richness of imagery, a model of courage or truthfulness, or a glimpse of the sheer breadth of the world out there, before and behind us.The Wolves of Willoughby Chase, Joan Aiken
Skellig, David Almond
The Children of Green Knowe, Lucy M. Boston
The Secret Garden, Frances Hodgson Burnett
The Dark Is Rising, Susan Cooper
Arthur: The Seeing Stone: Kevin Crossley-Holland
Charlotte Sometimes: Penelope Farmer
Down In The Cellar: Nicholas Stuart Gray
A Wrinkle In Time: Madeleine L'Engle
The Wizard of Earthsea, Ursula Le Guin
The Lion, The Witch and The Wardrobe: CS Lewis
The Ghost of Thomas Kempe: Penelope Lively
Anne Of Green Gables: LM Montgomery
Five Children and It, The Railway Children, The Treasure Seekers: E. Nesbit
Playing Beattie Bow: Ruth Park
Tom's Midnight Garden: Philippa Pearce
Swallows and Amazons: Arthur Ransome
Harry Potter: JK Rowling
Marianne Dreams: Catherine Storr
Ballet Shoes: Noel Streatfeild
Charlotte's Web: EB White
Many, but not all, of these titles contain an element of magic, or the uncanny, or a crossing from one time into another. (Adult writing which enters this territory tends to be thrust dismissively into the 'spec fic' basket... but that's a topic for another time!)
But perhaps what the really good children's novel does (and I'm thinking aloud here) is open out the boundaries of the child's world a little. It pushes and pulls and stretches, it exercises the muscles of imagination and empathy. But it's not just 'teaching' something - it is art, a thing of beauty and value in its own right, and without them, the world would be a poorer place indeed.