How To Give a Kid A History Book As a Gift Without Making An Enemy For Life. Check out Annette's book recommendations for elementary-age kids.
(This list is a work in progress, and was most recently updated November 23, 2009.)
If You Only Buy A Kid One History Book Ever, This Is It:
Anne Millard, A Street Through Time
I love this book. It's fun, imaginative, and teaches us all to think about what history really is: The story of change over time. This gorgeous picture book for ALL ages is a series of double-page panoramic views of the same imaginary European street from the Iron Age to the present. You will see dramatic change, and yet surprising continuities: The modern church, for example, occupies a spot used for worship for thousands of years.
Kids love the detailed and finely-drawn pictures. It's fun to spot the resurfacing of objects from the past: For example, two men in an eighteenth-century basement unearth a treasure chest that we last saw when it was buried in a Viking raid during 900 AD. The book is also refreshingly realistic, right down to characters pooping into pits.
A Street Through Time makes a fantastic gift for kids and you should expect it to quickly become well worn. The good news is that it's cheap, especially for a hardback!
And adults will enjoy it too. I'm always making off with my son's copy...
NON-FICTION:
Terry Deary, Horrible Histories
Chopped off heads... Sociopath kings and queens...Tales of the bizarre and twisted...What better way to get kids interested in history? Terry Deary's book series is huge (and still growing), and unbelievably popular in the UK. Here in America, we practically have to buy them in brown paper wrappers, when we can find them at all, thanks to the Appropriateness Nazis.
Happily, it is possible to order most of them, even if just in used copies on Amazon. It's hard for me to tell which titles will appeal most to your budding historian, but my son and I like The Horrible History of the World
The You Wouldn't Want To Series
See my full review on my blog...After all, You Wouldn't Want Your Kid To Miss Out on this fantastically illustrated, impeccably researched, intelligent, and fun series. My son is in the process of collecting them all...
DK Eyewitness Books
Delicious! Lots of neat facts and fabulous photos (of artifacts as well as original shots) in luscious, glossy color! Don't underestimate the power of these books to lure in reluctant historians of any age. Yum. Huge range of titles (and in lots of other subjects apart from history, too.) Very reasonably priced. Among my favorites: World War I 
FICTION
Jamila Gavin, Coram Boy
Otis, a travelling conman, promises desperate mothers that, in exchange for payment, he will deliver their babies to Thomas Coram's Foundling Hospital. In reality, he and his son Meshak murder the infants, but Otis is eventually caught and hanged. Two lucky orphans, who actually do make it to Coram's Hospital in one piece, are the focus of the rest of the book: Aaron (the circumstances of whose illegitimate birth is traced in the first half of the book) and Toby, the child of an enslaved African who was en route to the Americas. But how did they get to safety at Coram's? And who is the cruel Mr. Gaddarn?
If your kid (or you) wouldn't be unduly traumatized by a sympathetic, moral, and intelligent telling of a story that hinges on illegitimate birth and infanticide (and you might be surprised how many kids wouldn't), then give it a go. On the British Amazon site, one child reviewer wrote, "I am 12, I loved this book, and I have a nine year old sister who, although some of it went over her head, also thought it was brilliant!"
By the way, this novel (which has won serious awards) was turned into a play at London's National Theatre. Be careful not to buy the playscript by mistake. Just thought you might like to know.
Nina Bawden, Carrie's War 
I loved this novel as a kid, and I'm happy to see that it's still popular in England today. The story of Carrie Willow and her brother Nick, wartime evacuees from London to the remote Welsh countryside, speaks to the fears and anxieties of childhood, and the ways in which kids attempt to intervene in adult lives, with mixed results. Nina Bawden is a terrific author: Like J.K. Rowling, she *gets* kids, and she writes for them, not at them. Here's a great article for adults about Nina Bawden's life and work. Kids enjoy the feeling of sharing the journey of wartime childhood evacuation with Carrie and Nick, and they get a very real sense of what it felt like to be evacuated to a new life, and then wrenched back to the old one.