If elevator music grates your nerves, you're really going to like this. Jammy Jams takes popular tunes and turns them into incessantly chiming lullabies performed on vibraphone and piano without lyrics. That's one way to make some of these tunes suitable for all ages. The Once Upon a Rhyme collection of hip-hop songs includes Outkast's "Hey Ya," Jay-Z's "Big Pimpin" Dr. Dre's "Nuthin' But a 'G' Thang" and Coolio's "Gangsta's Paradise." There's also a whole album of Lady Gaga tunes, and if that's all a bit too heavy, there's an album of lullabied Christian rock. There are many samples on JJ's YouTube page. You can decide whether this will help children appreciate music.
Rock for toddlers seems to be a very tiny niche genre (as previously covered in Gambit). There's Los Angeles' based Black Rattle, a metal outfit for kiddies (cover of "Itsy Bitsy Spider" on its myspace page). San Francisco has the Beatles-esque touchy-feely Sippy Cups. The Mekons-alums filled Wee Hairy Beasties (on Chicago's Bloodshot Records) may still be the best of the kiddie bands.
And there are groups that find contemporary music that's already appropriate for young audiences. Here are some playlists from Wonderground Radio, on Minnesota Public Radio, and a parents blog about music families can share called Sparetherock.