I think designers tend to read too many specific books. I find it much more valuable and beneficial to read books about general topics and those that appear only peripherally related to design. Design is problem solving, right? So learn how to solve problems (with other people) better.

If you read only one book on this list, make it this one:

The Design of Everyday Things — Don Norman

Others:

• The Visual Display of Quantitative Information — Edward Tufte

• Designing Interactions — Bill Moggridge

• Make It So: Interaction Design Lessons from Science Fiction — Nathan Shedroff and Christopher Noessel (see also)

Not strictly UX but highly valuable:

• How to Talk so Kids Will Listen — Adele Faber and Elaine Mazlish (yes, really)

• Meditations — Marcus Aurelius

• On Writing Well — William Zinsser

• Reality Is Broken: Why Games Make Us Better and How They Can Change the World — Jane McGonigal

Here's my short but relevant reading list right now: Articulating Design Decisions - Tom Greever Don't Make Me Think: Revisited - Krug

Web Form Design (albeit written years ago) is a game changer for many new UX Designers. I also always recommend The Elements of User Experience Design by Jesse James Garrett.

Here's a list of my personal favorite UX reads (catered to UX beginners):

UX Beginner Reading List

Microinteractions - O'Reilly

Hidden in Plain Sight - Jan Chipchase

User Experience Team of One - Leah Buley

Something Really New: Three Simple Steps to Creating Truly Innovative Products

This is one that hasn't been rehashed over and over. Premise is simple: find tasks people have, create recipe lists of people doing those tasks, remove steps for folks. Really great way of organizing your thought in here on making products people are going to find super helpful. Has been a key thing in my own work.

For Information Architecture, check out Intertwingled by Peter Morville. More on the theoretical than the practical side, he takes you through the importance of how information is connected, interpreted and organized across peoples and cultures. Reminds me a bit of Zen and the Art of Motorcycle Maintenance by Robert Pirsig.

I am putting together a comprehensive list of UX books that will be available in the next couple weeks.

Some of my favourites are:

• The Elements of User Experience by Jesse-James Garret - great overview of what makes a great UX

• Undercover User Experience Design by Cennydd Bowles - practical companion to the Elements, showing you common methods and best practices that lead to great UX design

• Designing for Emotion by Aarron Walter - human side of design

• Sketching User Experiences: Getting the Design Right and the Right Design by Bill Buxton - its not about sketching per se, more about design process in general. Not as practical as all the books above, but still a great read

And probably surprisingly to many User Story Mapping by Jeff Patton. Great book overall, but especially useful if you are working in Agile environment. It will show you how building the Story map covers most of the ground that other traditional methods cover: e.g. personas and customer journey maps.

Here is a kit I put together on UI/UX design books: http://kit.com/aloke/ui-ux-design-reading-kit

I've got some recommended books listed here - http://www.gavinelliott.co.uk/recommended-books/

I have a post up here - http://chrisgillisdesign.com/articles/design-books-that-have-helped-my-career

I'd say "The Strategic Designer: Tools & Techniques for Managing the Design Process" is one of the best books out there - use it all the time.