One of the things I find interesting in the "Grognard" discussions I find on Grognardia and Google+ (which I'm still learning my way around) is looking back at the way we used to play, our early related interests, and how they reflected back into our gaming interests.
The thing is, there was a lot less fantasy of the sword`n'sorcery type in the late 70's. The thing that strikes me about Gygax's list at the end of the original DMG is pretty close to being a comprehensive list of the major fantasy authors up to that time.
The thing about fantasy RPG's is that they fit in quite neatly with a body of interests most of us who played them back in the day shared, at least to some degree. Not that we'd all read, or would read, or like, all the same books or all the same things. But there tended to be a great deal of overlap. When D&D appeared, it was natural that it would appeal to kids like us.
What were some of those things? For me:
Books and Stories: I already mentioned Gygax's list. By the time I started playing D&D, I'd read The Hobbit and parts of Lord of the Rings. The Bakshi adaptation came out not too long after my first exposure to the game (I liked it at the time but find it nigh-unwatchable now). I knew Conan from the comics (of course) but was picking up the Ace collections when I could find them used and cheap. I hadn't yet begun to notice that the stories by Howard alone were superior to any of the completions/pastiches, but all of my favorites at that point were Howard-written. I'd read a bit of Burroughs (again, first exposure had been through comics - DC's Weird Worlds very freely adapted John Carter and Pellucidar, and later Marvel's John Carter series - nice artwork by Gil Kane), some of H.P. Lovecraft's stories (total mind-fuckers), the first of the "Narnia" books and Andre Norton's "Steel Magic" which also made quite an impression on me. Not long before I ran my first campaign I was reading Leiber's Fafhrd/Mouser stories. I was well aware of Moorcock's stuff but didn't read any till later. I can't ignore the many books of fairy tales, knights and such that I always scooped up when I saw them, because I realized at a very early age that I loved that sort of thing. So Greek mythology, King Arthur, Robin Hood, and Ivanhoe surely went into the hopper. Edward Eager's books, especially Half Magic and Knight's Castle were very important. Oh, and I can't forget the Arabian Nights! We had a very nice illustrated edition that inspired me a lot very early, and of course the aforementioned Sinbad movies.