I rarely read kid's books (except what I read to $DAUGHTER in the past) but the Howl Trilogy by Diana Wynne Jones is an exception to that rule. The other two (Castle in the Sky and House of Many Ways) are also very much worth reading.

The movie takes only a moderate inspiration from the book. It's a lot of fun in its own way, but nowhere near any kind of faithful adaptation. DWJ loved it, though, by all reports (I'd met her, though couldn't claim to know here, though we have a number of mutual friends - she was moderately active in fandom earlier, but was slowing down by the time I was getting heavily involved).