Back in 2005, S and I wrote a children's book called Bee Careful, Marvin. We did the entire thing by hand using free/open source software (Ubuntu, Scribus, the Gimp, ...) and self-published it on Lulu.
After two years, I finally got around to updating the book. I updated the license to a Creative Commons BY-NC-SA 3.0 license, moved the licensing text to the end, added a dedication page and updated the colophon. I also put all the "source" in version control using Bazaar and built a Trac instance to manage it and any other books S and I write going foward. The Trac instance is at http://bluesock.org/~willg/marvin/.
The book is free--I encourage anyone to download it, purchase it, copy it, give it to a friend, give it to a child, translate it, adjust the layout, ... Light user testing has suggested it appeals to children between 2 and 4 years of age.
It took forever to get around to figuring out how to manage the pieces, but I'm pretty happy with what we've got set up. We're currently working on the next book... hopefully we'll get it done by the end of the year.