Hi there! The following is directly lifted from the original website - a lot has happened in the last 15-20 years. I will be making some updates to this list and adding amazon links again as I have time.
The first book I tell all my students to get (and mind you, we're American, so it's particularly relevant to us) is Drawing Down the Moon by Margot Adler. This book talks about the development of Paganism in America and the many traditions you will find, truly an excellent book.
The next author I highly recommend is Doreen Valiente who recently passed on to the Summerlands. Her writing style is very straightfoward, no-nonsense, with researched information, and her books are among the best to read if you want real Witchcraft. Her titles include: Natural Magic, Witchcraft for Tomorrow, An ABC of Witchcraft, & The Rebirth of Witchcraft. She also edited for Evan Jones Witchcraft, A Tradition Renewed which is an interesting read, but I would spend the money on the books she authored totally herself first before buying this book.
Janet and Stewart Farrar are Alexandrian Wiccans. Their tradition is a mixture of Ceremonial Magic, Gardnerian Wicca (Alex Sanders got his book of shadows from Gardner), and Irish Witchcraft. They have written many books including A Witch's Bible, The Witches' God, The Witches' Goddess---you can find their work and Valiente's as well at http://phoenixpublishing.com The Farrar's deity books are a good resource for divine studies, while their other books provide a key insight to the development of Wicca in the last century---yes, although you're looking for traditional resources, you should have a good understanding of the developments of Wicca and the practices within.
From Llewellyn is a decent set of books by the author Ann Moura (Aoumiel). The books are entitled Green Witchcraft (I and II) and they are relatively good resources. One note is that although they seem for beginners by the chapter titles, unless you have some background (like Valiente) in the history of Witchcraft and knowledge about Paganism in general, some of the information may not be fully understood. So I suggest reading these after getting some good historical foundation. Recently, Ann has published other "Green Witchcraft" books---these I do not recommend as highly, because they're mostly rehashed material from the first two books.
I first met Phyllis Curott several years ago and it was quite a wonderful experience, and from there we developed a professional relationship. She is very down-to-earth and sensible, and her Book of Shadows follows her nature well. In her book she describes her own personal journey into Witchcraft, which is something you rarely find out there. I highly recommend picking it up. Also, her new book Witchcrafting is out. I haven't had a chance to read, just flip through it, looks like another winner.
For those of you with a feminist slant, there are many excellent authors out there to explore the female divine with. Barbara G. Walker has written about a dozen books, and I have read most of them. The three I would most recommend is The Women's Encyclopedia of Myths and Secrets, The Women's Encyclopedia of Symbols and Sacred Objects, and Feminist Fairy Tales. Classic feminist Pagan literature includes Merlin Stone's When God Was a Woman and Ancient Mirrors of Womanhood, Monica Sjoo and Barbara Mor's The Great Cosmic Mother, Z Budapest's The Holy Book of Women's Mysteries, and Starhawk's The Spiral Dance.
Every Pagan should have a copy of Aradia, or The Gospel of the Witches by Charles Leland. (His other books area also excellent to have for folkloric research). I also tucked in here Marian Green's A Witch Alone, which is an interesting read, and for art and poetry, Witches by Erica Jong.
Published every year out of Rhode Island is the simple paper publication The Witches Almanac. It's now up to about $8 and is a useful tool for the phases of the moon, folklore, and other good tidbits. Llewellyn's Witches Calendar is good too, or any other lunar calendar you can find that gives you the times and dates for the moon's changing face. You'll find it very handy and useful to know what's going on in the sky to plan your Esbat and Sabbat rituals and celebrations.
Monica Furlong - Juniper and Wise Child are two wonderful young adult fiction books that I have always loved. They very much contain airs of Traditional Witchcraft intertwined within magickal, yet practical tales.
J K Rowling - Back when I moved to California, I needed a distraction to deal with the move, so I bought the first 3 Harry Potter books, and I think they certainly deserve to be here. (And just recently finished book 5, great stuff!) A really fun series for both children and adults. Not much to do with the actual religion of Witchcraft (despite the bitching from the fundies), but nonetheless a wonderful and whimsical read!
Chaim Potok - The Chosen and My Name Is Asher Lev are just two examples of amazing works from this Jewish scholar. You may be surprised that I have two books on Judaism on this list. I have long admired the Jewish faith, and Chaim Potok is simply a master of the human soul. The latter book in particularly is a must-read for all artists. I read it at least once a year.
Marion Zimmer Bradley - The Mists of Avalon I really can't say enough about Mists. Incredible work...every woman should read this book. It is the retelling of the Arthurian Legends from a woman's point of view, and goes deeply into Paganism. Other good books by Bradley include "The Inheritor", the Ghostlight series (Witchlight, Gravelight..),and "Firebrand."
Mercedes Lackey - The Serpent's Shadow is one of the newest books out by Lackey. Most people probably aren't surprised that she's on this list, but actually, this is the only book I have read by her. I thoroughly enjoyed it, and found the Indian references particularly interesting.
Jean George - My Side of the Mountain I don't know how many times I have read this book throughout my life, but my copy is very well-worn. A young boy leaves home to start a new life surviving off the the wilds of the Catskill Mountains.
Jean Auel - The Clan of the Cave Bear is the just the first book in the Earth Children series. Stories from the beginning of human civilization. Auel is an amazing story-teller, and I highly recommend reading the whole series. It's enthralling.
Stephen Cosgrove - Looking for Pagan oriented books for your children? There are about 50 different Serendipity books, all with great morals and just beautifully illustrated. Most of them are fable-oriented--that is, they are told from the point of the view of animals. I have about 25 of these books and treasure each and every one. I think the very first one I got was "Morgan and Yew." Search the amazon.com site for "Serendipity" books!