How to read to a child?
A lot, and often, even when they can read for themselves. Especially when they can read for themselves.
Apart from that, I am going to disagree (mildly) with deep thought's idea. With many books, it does help to use different voices for each character. it sometimes helps even more if you read in character and miss out the attributions, said Little Bear or Big Bear replied. Point to the relevant character as you say the words, if it helps. You can then read the story in the two, or three or more different voices, almost like a play. I have convinced myself that it helps understanding (or perhaps I'm just a frustrated thesp).
Second, as a variation on deep thought's let them finish the sentence game, try innocently changing one of the words. If the printed words say, the cat sat on the mat, read it out loud as the dog sat on the mat or, perhaps better, the cat sat on the bat, and see how they react. It's wonderful, and it helps the child to keep concentrating on what you are saying. If the child failed to notice first time around (unlikely) then emphasise it a bit more second time. It's a guaranteed crowd-pleaser for any child from just-talking up to about 6 or 7, and some older children.
Shhh! If, instead of mat, or bat, you choose Splat!, the reactions get even better. And if you use Toilet, then prepare for hysteria
Third, definitely let the child choose the book and/or story. If you are reading every night at bedtime, and they select the same one every night. turn it into a ritual. But to add variety, add in one more, which you choose. If they then start wanting to choose a different story, just go with the flow. Why not read two instead of one?
For older children, serialise the books, reading one chapter (or half a chapter) per session. The Hobbit, Harry Potter, C.S. Lewis' Narnia books and many others are good for this. Apart from the fact that these are great stories, it is a good way of testing the child's reaction, to see if they are ready to read these books on their own. Furthermore, reading out loud to good readers helps them learn how to pronounce some of those tricky words, which if they read by themselves, they'd rarely learn, or hear spoken.