Order of publication:
The Lion, The Witch, and the Wardrobe
Prince Caspian
Voyage of the Dawn Treader
The Silver Chair
A Horse and His Boy
The Magician's Nephew
The Last Battle
The above is the order you should read them in. They were written to be read in that order. Older boxed sets come in this order, but pity enough, newer publishers go in chronilogical order, namely:
The Magician's Nephew
The Lion, The Witch, and the Wardrobe
A Horse and His Boy
Prince Caspian
Voyage of the Dawn Treader
The Silver Chair
The Last Battle
Which is silly. First of all, the magician's nephew is a TERRIBLE introduction to the series. It's a great book, and one of my favorites, but starting there is silly. Really silly. Not only that, but it gives SPOILERS as to what happens in later (earlier) books. I mean, what good is a big surprise that things were prophesized a certain way when you already knew the prophesy? What good is a mystery involving a certain person's ancestry when you already know the answer? What good is characters making speclations about the past, about great shocking surprising revelations, when you've already been told? The order is there for a reason!
Beyond that, putting a Horse and His Boy directly after The Lion, The Witch, and the Wardrobe is also silly, because they don't flow into each other at all... they'd have to put A Horse and His Boy IN THE MIDDLE of The Lion, The Witch, and the Wardrobe to have it make any sense. The end of the first book goes straight into the beginning of the next, as is right and good. A Horse and His Boy is a FLASHBACK, a story written as a story... it's mentioned that in Caspian's time, a Horse and His Boy is told as a story then. In fine arabian storytelling format, the book is then made to tell the story that was told in the story which is actally history. That's how it's written, and it's written WELL.
Do yourself a favor: Read the books like they were meant to be read. The right way.