Leviathan by Scott Westerfeld

So I finished Leviathan over the weekend and it was AMAZING. It is set in an alternate Europe in 1914, the cusp of WWI. It centers around Alek, the Austria-Hungary prince who is on the run after his parents are assassinated, and Deryn, a Scottish girl who disguises herself as a boy to join the British navy. But these aren't the countries you know, Britain is "Darwinist" and has genetically engineered beasties that they use in place of machines. Austria-Hungary, on the other hand, is "Clanker," they use steam powered machines for everything; (check out pictures from the book to see a few examples). This is the first in a series and sets up exciting questions with lots of adventure.

If you enjoy Leviathan try one of these other steampunk novels:
Airborn by Kenneth Oppel
Mortal Engines by Philip Reeve
Larklight by Philip Reeve
His Dark Materials series by Philip Pullman
Airman by Eoin Colfer
Un Lun Dun by China Miéville
The Hunchback Assignments by Arthur Slade