Some more great toddler and preschool apps include:
Peekaboo Barn: This app is fun. The only downside is that it is $1.99. The graphics arecute, and the app has English and Spanish. Kids can tap on the screen to view a new animal, or guess the name of the animal just by hearing the sound it makes. New animals are added occasionally.
Park Math is another that is out. It's also $1.99 and is by the same developers as The Wheels on the Bus (another great app). The Developer is Duck Duck Moose and I love their apps, so I am getting a copy of this. Linked off this app is Word Magic for a little older kids. It's only $.99 and looks like it is great for helping with spelling and reading. Word Magic has some great levels too.
Word Wagon is another by Duck Duck Moose and one that I will be getting. It's also $1.99, but I really like this developers stuff. It becomes easier to find good apps if you find a developer you really like....
Also great for learning to read are the Dr. Seuss books - which you can get on iPhone in apps. These remind me of the Living Books software that was out in the mid 90s. There are lots of great Seuss books. The only down side is that these are around $3.99 each. - but Dr. Seuss and the newer Bob Books are great to read with your child to help start them reading.
A fun app is Spot the Dot, kind of like a version of Where's Waldo but using a fun dot to find. (Working on colors and fun for older kids too.) Though for $3.99 it's a toss up if it's worth it. I know I used to spend way more than that for software, but the main price point on the iOS is around $.99 and a lot of items are free - so......
Last but not least is a baby apps, Peek a Boo Baby Rattle, this isn't for older kids - but for a 3 month old this is worth the $.99 price. This is more interactive than Baby Einstein, but for that same age range. I wouldn't expect it to hole the attention of a two year old - so we didn't give it a try ourselves. It did receive great reviews though.