One type of story I really truly love are fractured fairytales. Well, actually I love fairytales full stop, both in their original, darker incarnations as well as the Disney-fied versions from my childhood. Obviously when we are dealing with traditional fairytales the girls tend to be a little more of the 'damsel-in-distress' mold, so this is where the fractured fairytale comes in. I suppose strictly speaking, The Paperbag Princess by Robert Munsch isn't exactly a fractured fairytale since the story doesn't retell any particular fairytale, rather it looks at a Prince and a Princess who are destined to be wed.
Princess Elizabeth is set on marrying the perfect Prince Roald. Prince Roald dresses very nicely, is suitably posh for a Prince, and seems to be quite the tennis player. Unfortunately, before the wedding can take place a dragon attacks the castle and carries off Roald. Elizabeth's royal garments are all burned up and she can only find a paperbag to wear. Tracking the dragon to his cave, she challenges him to various feats of flying and burning stuff until he is so exhausted he collapses leaving Elizabeth free to rescue Prince Roald. This is where Roald shows his true colours, telling Elizabeth that she isn't dressed at all appropriately for a Princess and to come back when she looks nicer (and cleaner). Elizabeth realises she is much too good for Roald and heads off into the sunset to live her life as an independent lady. (Woo hoo!)
I've had mixed responses when reading this one to young kids. Some just listen to the story without comment, I've had a couple of "Roald is like a toad!" comments and one comment from a little girl who wanted to know why they weren't getting married at the end. When I said it was because Roald was a toad, she still wanted to know why the Prince & the Princess weren't getting married. We obviously didn't get to her early enough.
This Paperbag Princess and other picture books of it's ilk (Princess Smartypants by Babette Cole to name another great) are fantastic to read to kids from a young age, combining them with a healthy dose of other fairytales as well, for a varied look at the world.