First up are two classics: The Random House Book of Poetry for Children,edited by Jack Prelutsky and illustrated by Arnold Lobel, and A Children's Garden of Verses by Robert Louis Stevenson.
Of course, no post on poetry for children would be complete without the works of Shel Silverstein - Where the Sidewalk Ends, The Giving Tree, A Light in the Attic, and more! I can't think of a single person in my inner circle of friends and family that wasn't in love with Shel Silverstein's books as a kid. And for most of us, that love continues into our adult lives. My son also still loves these books.
One of my favorite poets is Ted Hughes. Most people familiar with Hughes through his poetry collections that are more appropriate for adults (Birthday Letters or The Hawk in the Rain), or are familiar with Hughes as the ex-husband of poet Sylvia Plath. However, he wrote many collections of poetry for children. My favorite is Collected Poems for Children by Ted Hughes.
Punctuation Celebration by Elsa Knight Bruno. This is a cute collection of poems about the proper use of various punctuation marks.
And, a few more that my son enjoyed as a younger child (and still enjoys as a teen, although you won't get him to admit it!). In addition to most of these being hilarious, the illustrations in some are also amazing. Check out:
The Dragons Are Singing Tonight by Jack Prelutsky
For Laughing Out Loud edited by Jack Prelutsky
Vile Verses and Roald Dahl's Revolting Rhymes by Roald Dahl
Science Verse by Jon Scieszka