An excellent list of free Japanese audiobooks can be found here:
http://how-to-learn-any-language.com/forum/forum_posts.asp?TID=6241&PN=1...

Kokoro by Soseki Natsume is my personal favorite of those listed, but as it is an older work, the grammar and kanji can be difficult.

Personally, I recommend not using these until your Japanese is good enough to simply listen to the Japanese and read along with the text. Much of the discussion on that site suggests reading an English translation alongside the Japanese simultaneously, but this can do more harm than good. The biggest problem with the simultaneous texts approach is that your mind will stay in "English mode," making it that much more difficult to think-- and become fluent in-- Japanese.