A Story Before Bed (http://www.astorybeforebed.com) - Have ya'll seen this? According to their website, this company is "the first & only service that lets you record a children's book online with audio and video. Kids can play back the recording as often as they like on iPad, iPhone, Mac, or PC... A Story Before Bed is perfect for remote grandparents, split families, parents away on business or in the military, or even just mom and dad heading out for an evening." They also sell pre-recorded books.
I found the site by playing around on Jennifer Swanon's wonderful website - which is also worth checking out, especially if you are interested in non fiction children's books (http://www.jenniferswansonbooks.com).