There are lots of wonderful books to introduce your children to the culture and history of Ancient India. Living in New York City, we were able to combine our study with multiple outings to Little India in Jackson Heights, Queens, including during the festival of Diwali, as well as with trip to the South Asia galleries at the Metropolitan Museum of Art and the Rubin Museum of Art.
The vivid characters of Hindu mythology lend themselves well to children's exploration through play. My daughter found a lovely little Ganesh figurine in Little India, and played extensively with a set of drop-dead-gorgeous pop-up Hindu prayer altars available in book form. The whimsical folks of the Unemployed Philosophers Guild sell Ganesh, Shiva, and Buddha puppets. We talked quite a bit about how revered these figures are to those who believe in them, to underscore a message of cultural respect; but then, I've never considered it disrespectful for my kids to play gently with their grandmother's nativity scene at Christmastime.
Ganesh, the steadfast child of Shiva and Parvati who was fated swap his human head for one of an elephant, is widely beloved by children, and stories of his life are a great way to begin your study of Hindu mythology. Elephant Prince: The Story of Ganesh, is a stunningly beautiful introduction and highly recommended. Belgin K. Wedman's illustrations are breath-taking, and Amy Novesky tells the tale charmingly. Uma Krishnaswami's The Broken Tusk: Stories of the Hindu God Ganesha has simple line drawings for illustrations, but it covers so many episodes from the elephant-headed god's life that it too is highly recommended for any child who becomes captivated by this Hindu deity. How Ganesh Got His Elephant Head by Hanish Johari and Vatsala Sperling, part of a series of classic Indian stories for children (discussed further below), is another fine choice.
Anna Milbourne's Stories from India, published by Usborne, covers a lot of ground in one compact volume. You'll find folktales, stories of Hindu deities, and short sections from the Ramayana and Mahabharata. Don't expect a lot of depth here, but the tales are told clearly and illustrated pleasingly. The Elephant-Headed God and Other Hindu Tales by Debjani Chatterjee is another solid collection.
A great series published by Vermont's Bear Cub Books will enable you to explore individual Hindu deities in greater depth. Titles include The Magical Adventures of Krishna: How a Mischief Maker Saved the World, How Parvati Won the Heart of Shiva, and Ganga: The River That Flows from Heaven to Earth.
Another volume in this series, Hanuman's Journey to the Medicine Mountain, portrays one of the episodes in the great Indian epic The Ramayana. Most children will be entranced by this epic tale, although young children who are extra sensitive to violence may find parts of it frightening. Excellent versions for children include Jessica Souhami, Rama and the Demon King: An Ancient Tale from India and Verma Jatinder and Nilesh Mistry's lovely and magical The Story of Divaali.
While you're studying the Ramayana, you'll want to see Nini Paley's extraordinary animated film, Sita Sings the Blues, an inspired feminist interweaving of the tale of the Hindu epic with episodes from Paley's own life. I can't recommend it strongly enough, but do advise that there is some cartoony violence in the film and a curse word or two, which will likely sail over your young children's heads.
Several well-crafted children's books will introduce your kids to the life story of Gautama Siddhartha, the prince who left behind a life of luxury (and a wife and newborn child) to find and share spiritual enlightenment.
Our favorite of these is out of print at this writing, but a new edition is slated to appear on April 1, 2011. Jonathan Landlaw's Prince Siddhartha: The Story of Buddha features graceful illustrations by Janet Brooke and a lyrical presentation of the Buddha's life tale.