"Generally, by the time you are Real, most of your hair has been loved off, and your eyes drop out and you get loose in the joints and very shabby. But these things don't matter at all, because once you are Real you can't be ugly, except to people who don't understand." --The Skin Horse in The Velveteen Rabbit by Margery Williams
If I heard the Velveteen Rabbit as a kid I don't remember. No matter, we acquired several versions as the kids progressed through the bedtime story years. I was glad to see that you can find the text online. It make a great picture book but it also works well as "radio" -- with your imagination supplying the images. If you haven't read this story lately or aren't familiar with it, check it out here.
p.s. Yes, Virginia there is a Flickr "Velveteen Rabbit" group.