Follow this link from Harlow's Monkey to a great piece on white privilege and children's book by Laura Atkins. Atkins has been a book editor, and explains how books by non-white authors or featuring non-white characters are changed in the editing process to reflect majority culture.
Part of selection and editing of books in certain ways reflects the typical editor's place in majority culture. This self-confessional part explains it well: "I became aware, over time, of how my reaction to manuscripts was based within my background – class, race, education, and gender. I had certain expectations of the types of stories that were appropriate for children, ways of constructing a narrative, and content that was child-friendly. It was only in the context of working with authors from different backgrounds that these expectations were challenged."
The changes are also motivated, she says, by "market forces" (read: money) -- the desire to reach a wider audience, and appeal to institutional buyers like educators and librarians who tend to be white. She discusses in detail how a book she edited was watered-down (or perhaps more accurate to say white-washed) to meet that institutional audience.
Perhaps most shocking to me was the discussion of a publisher who placed the photo of a white girl on the cover of a children's book featuring a black girl. Atkins notes the lack of outrage over this incident in mainstream media.
Go read the whole thing -- it's not that long.
Addendum: Also thanks to Harlow's Monkey, this link to Sara Park's reaction to Atkins' piece, applying it to her interest in Asian-American characters in children's books and Asian-American adoption in children's books.
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