Little Red Riding Hood - Jacob Grimm;Wilhelm Grimm;Trina Schart Hyman
This is another one that trips me up. I don't even know where to start. It's an excellent retelling of the familiar tale - with a nice mixture of sweet, scary and gruesome. But none of that really matters because you will really want this for the art. In my humble opinion this is the only version of this tale I've found that's worth owning.

Others illustrated by the incomparable Trina Schart Hyman not to be missed:

The Fortune-Tellers Picture Puffin Books
Saint George and The Dragon

ETA: If you need further proof as to why this is the most perfect version of this tale, check out this quote by TSH herself:

My mother is a beautiful woman with red hair and the piercing blue gaze of a hawk. She never seemed afraid of anyone or anything. It was she who gave me the courage to draw and a love of books. She read to me from the time I was a baby, and once, when I was three or four and she was reading my favorite story, the words on the page, her spoken words, and the scenes in my head fell together in a blinding flash. I could read! The story was "Little Red Riding Hood, and it was so much a part of me that I actually became Little Red Riding Hood. My mother sewed me a red satin cape with a hood that I wore almost every day, and on those days, she would make me a "basket of goodies" to take to my grandmother's house. (My grandmother lived in Rhode Island, three hundred miles away, but that didn't matter.)

She *was* little red riding hood! So am I! And so is my daughter! And so are you and basically anyone and everyone who believes in the power of great stories!