My latest recommendation for you is Where the Mountain Meets the Moon by Grace Lin.
This is the story of Minli, who lives in the shadow of Fruitless Mountain, and how she changes her fate. Minli's story is interspersed with relevant folk tales that guide her and shape her own tale. Quick pacing ( characteristic of the folk tale) and short chapters make it an excellent candidate for reading aloud. I hope to read it with my boys, once they've finished The Lion the Witch and the Wardrobe with Jacob. The story is punctuated with lovely illustrations by the author.
This is a recent Newbery Honor book, and it deserved the recognition in my opinion. I'm glad I have it in my personal collection -- I bought it at KidLitCon last year, where Grace Lin spoke. I had heard a lot of good about it online, and after the first chapter I was still on the fence, but I quickly fell into camp This-book-is-awesome. I think I was pretty much hooked after Minli bought the goldfish (pun intended). Definitely check it out.
Where the Mountain Meets the Moon has a companion book that just came out, Starry River of the Sky. I plan on tracking that one down.
My review of Grace Lin's The Year of the Dog