One spot to make real money in kids books is in book series. You've probably heard of the Goosebumps books, although you probably haven't read them. These days big sales come from Young Adult series focused on upper crust girls and their sex lives -- series like The A-List and Gossip Girl. Also big - vampires and werewolves with a twist in books like Twilight, and faeries in books by Holly Black. Chapter book series kick ass too - the Katie Kazoo series has nearly 5 million books in print.
I'd like write something good, don't get me wrong. But I'd also like to make money writing.
So I'm thinking about a book series. I think I have a kick ass idea (not to be shared on the interent, thanks anyway!) and am forging ahead.
The other good thing about books series? You don't have to write the whole first book to get it bought - just a fabulous proposal and the first three chapter. I'm gonna churn that out in a couple of months, if my insane schedule permits. Wish me luck!