Stephen Krashen has done a ton of research on what he calls Free Voluntary Reading. Catch up on his research by checking it out on his website. Basically, the premise is that kids learn more (and language learners acquire more vocabulary) when reading at an appropriate leve and something that is pleasurable to them. I was so won over by the research in this area that last year I decided my students were going to read a fiction book outside of class. Mi criteria were that the book had to be related to Latin culture in some way, preferably by a Latino/a author. As a result, my students read Cajas de cartón in the fall of Spanish 3, Esperanza renace in the spring of Spanish 3, and Ciudad de las bestias in AP Spanish. Watching my AP Spanish students read now, after reading the two books last year, I can see how much their reading comprehension has jumped. Also, they could tell you countless stories of how certain vocabulary are imprinted in their memories because of reoccurrences in context in the books, which they like.
Last year I had them read the chapter and then take an open-book quiz in class the day the chapter was due. There were some problems with that, especially that it was very time-consuming and I value my in-class time too much. So this year, they are doing reading guides instead, and this has worked wonderfully. As a taste, here is the list of Palabras Claves and here is the Reading Guide for Chapter 10 of Ciudad. I'm a firm believer in not reinventing the wheel, so if you want any or all of the reading guides (and vocab lists) message me on twitter at secottrell and I'll upload them all to my Google Docs.
Get kids reading level-appropriate fun stories--it works!