They are the most difficult form of the short story format that one can attempt.
In order of difficulty from easiest to hardest would be; novel, short story, children's book, poetry, with the ultimate of poetry being the haiku.
All the rules of story structure apply; but with children's books you have a much tougher audience, and a lot less room for error. And you're actually writing to satisfy two audiences; the parent who will buy and read the book and the child who will want to hear it over and over again.
Aspiring writers make this mistake all the time. They think that the shorter the "book" and the fewer the words the easier it is to write - when the opposite is true.
Go to http://www.write-better-fiction.com and read very carefully the definition of "story".
