Audio Owl has free books for adults and kids to listen to. There are classics of children's literature like Seven Little Australians, and The Water Babies. There are Fairy Tales, and Folk Tales too such as Brer Rabbit's adventures. I found an old favourite I'd forgotten, The Reluctant Dragon by Kenneth Grahame, and many beloved friends from my childhood, like What Katy Did, and Anne of Green Gables.
You can listen to a preview very easily, then download the zipped mp3 files of the whole book if you want. Formats also include for iPod and iTunes. It's fun to browse among the book covers. If you are looking for something different, check out Struwwelpeter by Heinrich Hoffman. Many people have criticised this old book as brutal, but my Year Six boys loved me to read aloud from its cautionary and violent rhyming tales.
If you want your children to discover authors like Mark Twain, Beatrix Potter and Lewis Carroll, and titles like Pinocchio, Peter Pan and Black Beauty, then visit Audio Owl. If you are looking for audio books so your kids will develop their listening skills, this site will make an excellent start.