The earlier mentioned "Peter and the Wolf" by Dave Van Ronk is available on CD.

My kids used to love cdertain cuts on Spider John Koerner's "Nobody Knows the Trouble I've Been" and "Raised by Humans". These are not kid's collections, but they include some songs which are often found on 'standard folk kids collections' (whatever that might mean). I really appreciate the fact that Spider John puts those in his albums right along with everything else.

If you are looking for a song book try "Gonna Sing My Head Off". It is well put together with nice illustratons and nice, succinct and appropriate background stories about the songs. (It is a favorite choice of my fourth grade students during self selected reading time.)