I think illustrations are incredibly important to a young reader. It helps with one's understanding of the narrative and enhances the reading experience.
My son struggled with reading for many years, but got an enormous amount of confidence in his reading from the illustrations in books such as the many Dr. Seuss stories, and another firm favourite of The Monster Bed.
In later years he went more for the macho manual and catalogues (lots of pictures again), and now in his twenties he is an avid reader (Hurray!).
For myself, the illustrations in the CS Lewis Chronicles of Narnia helped to bring the books to life and taught me that we all have an internal picture of what we read. Sometimes the illustrator has captured my visual impression of a story, and at other times I've felt that they saw something completely different from me.
My first Chritmas present from my OH was a limited edition collectors' box of The Hobbit, with a hardcover copy, a booklet, a map (by J.Howe) and 8 postcards by Tolkein, plus a cd recording of Tolkein reading Bilbo's meeting with Gollum - How could I NOT have married this man!