I can't beat the existing best answer! But to add a few more points...
Don't underestimate the value of pictures
If your children are too young to read, the pictures help the child stay with the story, whilst you read the words. The really good ones, like Axel Scheffler for Julia Donaldson's books, add extra depth to the story. And you can involve the child more with "can you see the squirrel?" or things like that, to make it more interactive and less "sit down and be read at".
Read it yourself, and choose for quality
It's impossible to overstate how many rubbish children's books there are. Julia Donaldson has demonstrated that you can get a plot, humour, clever language and still keep the kids' attention. "The Very Hungry Caterpillar" seems simple, but think about it a little and you start to understand just how clever it is.
Of course there are a lot of books repeating old fairy stories too - but even they can vary in quality. My parents had Jack Kent's books when I was a kid, and they worked just as well for my son. I can't say the old Ladybird books held up well when I came back to them.
The more you appreciate the story yourself, the more your children will. They may not be able to tell you why they like it, but they'll respond to it all the same.
Do the voices
Nothing is more guaranteed to get your kids appreciating Goldilocks than if you can do a Big Growly Daddy Bear Voice, a softer calmer mummy bear growl, and a high-pitched-squeaky-baby-bear. Foxes sound like a dodgy used-car salesman (and if you smile so it shows your teeth, even more so). Snakes exssstend everyyyyy ssssyllable ssssibilantly. Trolls, gruffalos, giants and other big monsters who exist to be outwitted Speak Slooowly Because They Think Slooowly (and if you push your jaw out so your bottom teeth are in front of your top lip, you'll get a good monster voice).
This does become more challenging when your child is 9, and you're reading "Artemis Fowl" to him, and you realize you need unique voices for roughly a dozen characters, and you have to remember which voice you used for each one. Although after 9 years you'll have had plenty of practise...
Even if you don't do the full-on voices though, at least make sure you're doing more than just reading a word at a time like reciting a shopping list. Make it sound exciting. It's so sad hearing a parent who's clearly just going through the motions of reading the words, and not actually getting into the story.