In addition to the original Appendix N:
"A Song of Ice and Fire" is an obvious choice, and probably "The Wheel of Time," though I feel any recommendation for that series should come with a caveat: "Read the first 3-6 books, depending on taste. Then switch to reading online synopses and stick to that through at least book 9. You may possibly wish to begin reading the books again at some point after that. I wouldn't know."
Stephen King's "The Dark Tower" series. While not quite usual D&D fare, it's a very well-done quest in a fascinating points-of-light setting, and rich with material that could inspire adventures.
Ursula LeGuin's Earthsea trilogy.
Neil Gaiman's Sandman books, "Neverwhere," and "Stardust."
Lloyd Alexander's "Chronicles of Prydain."
Homer's "Odyssey." Not the "Iliad," you can skip that, it's mostly just a catalog of who won what at whose funeral games. But the "Odyssey" is much better reading, and does a great job putting some of the game's mythological critters into context.
Sun Tzu's "Art of War."
Guy Gavriel Kay's Sarantine Mosaic, "Tigana," "The Lions of Al-Rassan," and "A Song for Arbonne."
Mary Stewart's Merlin trilogy (and "The Wicked Day," the sequel from Mordred's point of view).
Bernard Cornwall's "Warlord Chronicles," for a different take on the Arthurian legend.
I would mostly avoid listing books based on D&D, for two reasons. First, D&D is plenty insular and self-referential as it is, we don't need to encourage more of that. Second, most books based on D&D suck horribly. However, I'd make an exception for the Dragonlance Chronicles and Legends; they're far and away the best I've seen of the D&D-book genre, and they hold an important place in the history of the game.