I'm married to a musician, so all of our daughter's CDs had to pass a tough test... He chucked Raffi and the Wiggles out when they were handed down to us. They've got to have some talent, and not make us want to strangle ourselves...
Here's our basic stock (you can get them all on Amazon)
They Might Be Giants: "Here Come the ABCs", "Here Come the 123s" and "No!" - I was a huge fan of these guys in HS. They are quirky and educational.
"Jazz for Kids" - if you have to listen to Old McDonald, there is no one better than Ella Fitzgerald to sing it!
Nickelcreek "Little Cowpoke"
Trout Fishing in America "Family Music Party" - we haven't heard any of their other stuff - this was a recent gift. it is hysterical, and our daughter loves it.