Ismat's Eid (ISBN 978-81-8146-405-7) by Fawzia Gilani-Williams and illustrated by Proiti Roy. It is published by Tulika Publishers, Chennai, India.
I read it in English, but it is also available in Tamil, Hindi, Kannada, Telugu, Marathi, Gujarati and Bangla. The author sent me the copy I read, so I cannot comment on purchasing from the Tulika web site. As of September 22, 2008, I did not find it at astrolabe.com or IslamicBookstore.com.
I like this story a lot. It celebrates Eid, it shows Muslims hard at work, and it shows a Muslim family performing kind deeds for each other and laughing together. The illustrations are excellent as well.
Although I've never seen this before and I have no idea how helpful this is, the book is rated for listening to by children four years and older and for reading by children six years and older.