Children's books are as unique as the children that read them. They are very individualistic and would be very difficult to fit them in a class. Each book deserves its own.
Here is a draft for one (very rough, but just to illustrate that it is not that hard to develop a special template),


and here is the code to play with:
\documentclass[11pt]{book}
\usepackage[svgnames]{xcolor}
\usepackage{ifpdf}
\usepackage{graphicx}
\frenchspacing
\newfont{\HUGE}{cmr17 at 96pt}
\setlength{\textwidth}{3.0in}
\setlength{\textheight}{5.125in}
\setlength{\oddsidemargin}{0.0in}
\setlength{\evensidemargin}{-0.375in}
\setlength{\topmargin}{-0.375in}
\setlength{\headsep}{0.25in}
\setlength{\headheight}{0.125in}
\setlength{\footskip}{0.25in}
\setlength{\parindent}{0.5\parindent}
\ifpdf
\pdfpageheight 7.5in
\pdfpagewidth 4.625in
\else
%\setlength{\paperheight}{7.5in}
%\setlength{\paperwidth}{4.625in}
\addtolength{\oddsidemargin}{1.9375in}
\addtolength{\evensidemargin}{1.9375in}
\addtolength{\topmargin}{1.75in}
\fi
\newcommand{\hstroke}{\rule[0.5ex]{5.0em}{0.2ex}}
\begin{document}
\newpage
\thispagestyle{empty}
\begin{center}
\setlength{\unitlength}{1.0em}%
\begin{picture}(45,16)(0,0)
\put(-0.625,0){\framebox(6.2,7.25){\HUGE \textcolor{purple}{A}}}
\put(5.875,5.625){\parbox[t]{15em}{\Huge \noindent LITTLE GIFT\linebreak
\raggedright FOR LITTLE\linebreak
FEET\linebreak
}}
\end{picture}
\hspace*{-0.6em}\rule{1.08\textwidth}{0.3ex}\\
{\small \sc by}\\
{\small YIANNIS LAZARIDES}\\
{\footnotesize Author of ``Myths of TeX''}\\
\vspace*{18.5 ex}
\rule{\textwidth}{0.3ex}\\
{\small
DOHA\phantom{ZZZZZ,}\hfill\raisebox{0.5ex}{$\bullet$}\hfill THE CAMEL\linebreak
QATAR\hfill\raisebox{0.5ex}{$\bullet$}\hfill PRESS
}
\end{center}
\newpage
\thispagestyle{empty}
\vspace*{18ex}
\begin{center}
{\em Copyright, $\mit 2011$}\\
{\sc By the Little Girl \& Company}\\
\hstroke\\
{\em All rights reserved}\\
\vspace*{18ex}
{\sc A little story book}\\
{\sc for a little girl}\\
\vspace*{12ex}
Made in the wild.
\end{center}
\newpage
\frontmatter
\thispagestyle{empty}
\vspace*{20ex}
\begin{center}
{\scriptsize FOR}\\
{\large \bf Li, Mary and John}\\
\smallskip
{\footnotesize AND THE REST\\
OF THE WORLD'S\\
CHILDREN}
\end{center}
\newpage
\thispagestyle{empty}
\newpage
\mainmatter
\chapter*{Stories of Greece}
\Large
Once upon a time there were two girls. One of them lived in Greece and the other on lived on the land of the Moon \ldots
\pagebreak
\includegraphics[width=3.5in]{children-0}
\ldots and there was a time when everyone was dressed in white\ldots
\hskip-1in\includegraphics[width=1.43\textwidth]{children-01}
\ldots and the gods had wings and there were no demons \ldots
\par
\pagebreak
\hskip-.5in\includegraphics[width=1.43\textwidth]{children-03}
\bigskip
\ldots and on the other side of the world in the Land of the Moon Wi Li was sleeping \ldots
\end{document}
You can view the pdf at crocodoc.
... and I think the books should be small to fit on small laps and to be easy for little fingers to flip the pages...
\maketitleworks with the title and author). I would probably use TikZ to make the templates since it gives easy access to absolute and relative positioning on the page. So on each page you'd have\text{Hercules strangled the snakes} \image{HerculesAndSnakes.jpg} \usepagetemplate{text under picture}. I certainly don't know of a package already in existence for this, but it wouldn't be hard to make one if not. – Andrew Stacey Oct 11 '11 at 10:31