Like CCN, I also wrote short 'early reader' stories for my DS when he was about 2.5-3. I made the stories about him, so he loved to read them. I drew simple pictures to give him context clues, and he loved to color them.
My DS loved pbs.org and starfall.com nearer to 3. My DD2 also adores my KindleFire and can play the games so easily since a finger tap is all you need. Her favorites right now are a puzzle app, a match-making app, and she's a mean Fruit Ninja, LOL. Interestingly, my DD has been talking in complete sentences since 15 months...but it was my "late-talking" DS who was reading at 2.
