My kids have always loved the songs from Sesame Street. Even my 24-yr-old punk rocker still sings 'em. Tom Chapin has some wonderful CD's of original stuff, and somebody already mentioned Tom Paxton. I haven't heard Ella Jenkins myself, but there are scads of Ella Jenkins CD's that have been reissued recently.
My favorite children's recordings are the songs that have withstood the test of time. There are wonderful recordings of more traditional children's songs from Priscilla Herdman, John McCutcheon, Cathy Fink & Marcy Marxer, and Fred Penner.
I discovered Fred Penner in the 99-cent bin at the Tower Outlet. He has TWO recordings of "The Cat Came Back," for a grand total of about eleventy-seven verses.