It's no secret that my oldest is a READER (I just couldn't emphasize it enough). She loves, loves, loves to read. She's finishing off Nancy Drew books at an alarming pace. I can barely keep up with the supply. She has read the first 12 books. I think she's averaging a book in a little less than a week.
During a play date with another homeschool mom of a girl in the same grade, I mentioned the Nancy Drew books and she looked at me with some surprise and said that they were fifth grade level books. Can I tell you I had no idea what she was talking about? I knew that Junie B. Jones and Magic Treehouse were pretty low-level. After that she moved to the Disney Fairy books and Judy Moody (according to the back of the Fairy books, they were about 3rd grade). I was anxious to get along into more substantial territory. When she started reading Nancy Drew, I was pleased.
Now that I know they have some reading level associated with them, I'm anxious to find other books that she might like that are similar. I've had a heck of a time finding the right level of books in the past. When I got her the Edge Chronicles books, I had to do a lot of reading aloud to pique her interest. Once the story took off, I couldn't read them fast enough for her and she did most of the rest herself.
I just found this resource at Hoagie's Gifted Education Page (found from a Google search for 'how to determine grade level of book') which also leads to this cool widget on Scholastic.
It's called "BookAlike." You type in the name of a book your child is already reading (or has tried to read) and you can get books recommended at the same level or at higher or lower levels. I don't even know what levels means and there can be some variation, but it is a huge help in just knowing some things to check out.