The Wizard in the Tree by Lloyd Alexander

If you're a kid (or adult) who hasn't read Lloyd Alexander's Prydain Chronicles (Newbery Honor for the second book, The Black Cauldron and Newbery Winning for the High King , a series starting with The Book of Three) do it. Sure, it's kind of a Lord of the Rings knockoff for kids, but Alexander's ear for poetry in prose is undeniable, and perfectly suited for children's literature. I loved those books as a kids, and as an adult, reread (sort of... I never really read it in the first place, but knew the plot of all three books since my sister told me the stories so many times I might as well have read them) the Westmark Trilogy, a fabulous trilogy about a revolution from the books up.
So when I found this odd title, The Wizard in the Tree, at my favorite used bookstore in the bay area (Dark Carnival, go guys go) I had to read it. And while it was not quite as good as some of Alexander's other, more famous work, it was still an incredibly enjoyable read, perfect for middle grade readers in the middle of the pack, ages 8 to 12. At times funny, others violent (there are some murders), this book creates a wonderful anti-Potter definition of the true nature of magic, with some clever environmentalist themes that make it timely, even if it is the silly story of a little girl who finds a wizard in a tree.
Complete with plucky heroine, curmudgeonly wizard, and eeeevil (yes, so evil he's eeeevil) squire, The Wizard in the Tree is a clever story from a very clever author, whose breadth of work I am just beginning to appreciate.

And seriously, read the Prydain Chronicles, and its awesome companion book of short stories, The Foundling. Awesome.