My favorite knitting book is The Complete Book of Knitting by Barbara Abbey. I've had it for years and still love it.
Here are some other good knitting books for beginners:
Baby Knits for Beginners by Debbie Bliss
Easy Knitted Accessories: Funky And Fashionable Projects For The Novice Knitter
The Complete Idiot's Guide to Knitting and Crocheting by Barbara Breiter.
The Knitters Bible, by Claire Crompton.
The Harmony Guides (several versions) of Knitting Stitches and Knitting Techniques will show you every stitch you could ever want and explain the techniques to make them.
At Knit's End - Meditations for Women Who Knit Too Much by Stephanie Pearl-McPhee is a funny little book that all knitters will enjoy.
Amazon, Barnes and Noble, Borders Bookstore have discounted prices on craft books, including knitting books, Go to their web sites, but also check out your local bookstores. They often have craft books on sale.
TIP: don't forget to go to e-bay.com and half.com to look for books.