Books, love the display, you can find similar results using a spice rack (I've geard ikea has a great one for, but It seems there always sold out, see my DIY section for handmade). Also see my printables section for the abc, read cards display in this pic, vintage read cards.
Elephant Accents in this Modern Nursery
This site has great ideas for kids' parties and rooms. It will come in handy when it's time to redo the boys' rooms.
Great idea for small nursery - wall mounted book rack (place under/over a floating shelf at table height near reading chair)