Audio books for the very young are somewhat difficult because they are usually only about two minutes long. One of the greatest things libraries now offer is the ability to download audio books onto your iPod. At my local library I could download any of the Pinkalicious books for 14 days. So while they are only a few minutes long each, if you download several they can last for a few car rides.
Additionally, here are a few suggestions for longer CD's:
Animal Tales read by Jim Weiss. Includes: The Three Billy Goats Gruff, The Lion and the Mouse, The Rortise and the Hare, The Crow and the Pitcher, City Mouse, Country Mouse, Giggly Biggly and the Invitation, Goat Gets Away, The Cat Who Went to Church, and Canticleer the Rooster
A blast from the past...
Two wonderful song and story collections that I listened to growing up.