To answer the question directly, the hardcover Dutton print (ISBN 978-0525457589) is the edition you want. (Confirmation: Amazon "look inside", LibraryThing reader, staff at michaelende.de).
To answer the underlying premise of the question re: illustration/typesetting of the book, it looks like you'll want to find editions that list Roswitha Quadflieg as the illustrator:
Roswitha Quadflieg has given Michael Ende’s novel "Die unendliche
Geschichte" (The Neverending Story) its two-coloured form and painted
the vignettes. (michaelende.de)
So - the original German version (all images from Amos Carpenter):
the start of each of the 26 chapters, where an entire page is taken up
by the drop cap for each letter in the alphabet from A to Z.
Red and green text:
This fantasy story is set in both our “real” world and “Fantastica”
and, to emphasise when the story switches from
one to the other, they are actually in different colours – red for the
“normal” world, and blue-green for the world inside the book which the
main character reads and into which he is drawn more and more as the
and the first edition English version as well:
Cover of the first English edition (Doubleday):