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I vigorously second "Matilda," and will also add another Roald Dahl adaptation -- "The Witches." Best for kids a little older (8-10 and up), but for kids who like suspense and a little dose of horror, it's great -- a creepy story, well-told, but without gore and with a kid-friendly (but not cheesy) ending.
"Dark Crystal" is another one that I second. And even though I already mentioned it, I'm still going to reiterate: "The Last Unicorn." Definitely my #1 for best kids' movie, period. If you haven't seen it, DO!