Abarat by Clive Barker.   Barker's first illustrated children's book arrived around the same time that several other adult mainstream authors were trying their hand at the younger set - Neil Gaiman had had a hit with Coraline, and Michael Chabon turned out Summerland.  I remember reading The Thief of Always when I was much younger, thinking that it reminded me of a deliberately nostalgic Bradbury tale.  While Thief got away with it, Abarat is far too deliberately young.  Not being the target audience, I can't say for certain how much young readers like slightly didactic novels, but its my impression that YA is becoming far more similar to its grown-up counterparts.  What's strange is that Barker should be so well known for his horror and return to a writing style evocative of the '30's or '40's. 

His world is colorful and his characters deliberately familiar, but it's all just a bit too pat - part of the problem I had with China Mieville's children's offering, Un Lun Dun.  It's a fantasy adventure quest, with a small-town midwestern girl heroine and a lot of colorful allies and monsters and primitive "whimsical" illustrations by Barker himself.  The good news is that it reads very very quickly, even if it does set up a sequel.  Recommended more for the nostalgic than the fantasy-horror fan - If you like L. Frank Baum's original OZ novels and want something slightly reminiscent, you may enjoy Abarat.