I would also recommend "The Borrowers" series. There is something fascinating about tiny people living secretly in the walls and under the floors that really appeals to kids.
yes, yes, yes! in fact, i still have my book from when i was a little girl... i found it last year in my mother's garage! my boys read it... they are now 7 and 12... i do remember that the first chapter book i ever read was Charlotte's Web... and speaking of Charlotte's Web, how about E.B. White? The Trumpet of the Swan and Stuart Little... i especially liked The Trumpet of the Swan... my 4th grade teacher read that to us over 30 years ago...