I've heard quite a few albums of Christian music for kids. I don't mention many of them here not for philosophical reasons (last fall's religious record roundup notwithstanding), but because they're often pretty uncompelling musically.
This four-song sampler from the new quartet Rain for Roots suggests strongly that their forthcoming (May 15th) debut album Big Stories for Little Ones (based on the poems of Sally Lloyd-Jones) will be in the minority of musically worthy records. Coal Train Railroad's Katy Bowser is part of the band, so there's a little bit of kids music background already, but singers Sandra McCracken, Ellie Holcomb, and Flo Paris sound like they're ready to jump in. I don't think Ricky Gervais or Richard Dawkins will be downloading this, but I think Christians who dig this website will dig this.