My son read The Hobbit around 8; my dd at 9. He’s read it six more times since.
He has the larger, Illustrated version w/Micheal Hague’s illustrations. Other beautiful ones are: one with Tolkein’s own drawings and the one with Alan Lee’s illustrations (the most famous visualization of Middle Earth from which the movie’s visuals/clothing, etc., were based)
For LotR, he was 10; my dd 11. Again, if you can get the ones with Alan Lee’s drawings, they’re awesome.
The Silmarillion he started at age 11 and he said that it was definitely a harder read than LotR, but knowing the background mythology of Middle Earth enhances your understading of the other stories and how it stands apart from other books (Tolkein’s wizards are COMPLETELY different, from their origination and purpose than say-Harry Potter wizards, BLECH!). My son, on his own, was able to make the connections with the Biblical account of Creation, too.
You really have to be an LotR fan to make it through The Silmarillion, though; it’s not for everyone. It is a little more descriptive in it’s battles, since Morgoth (master of Sauron who was a fallen Valar-a Creator of Middle Earth) was more powerful and evil than Sauron as well as other mythological animals that served the Enemy and evil was trying to establish itself over the Good.
Because of his age I got him a larger print, beautifully illustrated version of Silmarillion here:
http://www.amazon.com/The-Silmarillion-J-R-R-Tolkien/dp/0618391118/ref=sr_1_15?ie=UTF8&qid=1342103564&sr=8-15&keywords=the+hobbit
He also owns The Atlas of Middle Earth; which is very helpful in following the activities on maps of what happened in the 1st-3rd ages of Middle Earth.
Here: http://www.amazon.com/The-Atlas-Middle-Earth-Revised-Edition/dp/0618126996/ref=pd_sim_b_6
We also enjoy the audios-both dramatized and the unabridged.
LotR dramatized by the BBC in 1987, starring Ian Holm as Frodo (he was Bilbo in the movies). I’d recommend listening to after he reads The Hobbit and when he’s older- the Black Riders and Golem sound creepy.
Unabridged version of The Hobbit by Rob Inglis
I think the dramatized version is the BBC production.
Lastly, for fun, we follow along with the movie production of The Hobbit: http://www.thehobbitblog.com/
Yes, we’re big fans too! They are great for wonderful conversation and impromptu analyzation.