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Magazines, yes, but I don't see a big shift for children's books, yet. Parents aren't all keen on the idea of their child's developing eyes staring at a backlit display for hours on end. Also children destroy things. Maybe illustrated books that are practical in nature, like guides/craft etc. Tablets serve ephemeral multimedia content, imo, which is why magazines/newspapers, lightly read and disposable, work well for tabs.
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A big part of the NC's success is because of its emphasis on children's books
NOOK KIDS
Parents with kids love the iPad.
IPAD CHILDREN"S BOOKS
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When it comes to books, my guess is most people won't tolerate it. They don't tolerate it in paper books now. I'm not talking about the occasional ad stuck in the back of an mmp, which is itself even rare, but embedded advertising. Advertising works best in a low/shifting attention span environment.
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Again, how the ads are implemented will be key. The KSO shows that you can introduce ads into a reading environment in a way consumers will accept.