Literature Circles and Book Clubs

I am still using my small group leveled reading books in my guided reading groups at this point in the year.  However, I'd really like to keep the enthusiasm for reading in general up.  Since I've been hearing so much about book clubs and literature circles lately, I thought I'd check it out.

Original version of literature circles: 

1. The teacher chooses the book students will read and assigns each student a "job" in the circle. 
2. Students read the novel together as a group and as they read, each student does their "job."  I have used this model in the past.  Below is an example of some of the group jobs and their descriptions. 
3. The teacher assigns follow-up comprehension questions that are usually pre-written.   Students are expected to answer these as a group.  In this scenario, the teacher is still the leader of discussion. 

New way of looking at literature circles (AKA: book clubs)

1. The teacher lays out several different novels of varying reading levels. 
2. Students choose the book they want to read and the groups are formed by the interest in that book.  I always remind students they must be able to pass the "five finger rule" (turn to a random page and read it without making more than 5 mistakes) in order to choose that book.
3. Students read the novel on their own for 3-4 days, marking points of interest with sticky notes or scraps of paper.  This would be where each child would be a "Word Detective", "Connector", "Captain Answer" and "Summarizer."  They would EACH be responsible for having that job done/recorded in their notebooks when they returned to group.
4. The teacher is more of an observer as the students share the questions they had while reading and help each other to answer them.  I made a tally chart (below) that I use to keep track of student progress and assign a participation grade.

Which version do you use?  Can you recommend any good novels that are on 3rd, 4th, and 5th grade levels?