Llama Llama Red Pyjama, as read by author Anna Dewdney. Lily is OBSESSED with the "scary" llama picture when he has the quilt pulled up to his eyes. Of course, I do tend to escalate the story dramatically when I read it.
The Pajama Elves Story - a Christmas Eve Tradition where elves deliver magical pajamas to good girls and boys that help them sleep soundly on Christmas Eve.(where has the story been all my life??) I really need this book!