My two-year-old and I have both fallen in love with the app. He loves the fact that each letter has its own interactive experience (kids can play the Xylophone, a Fan blows the text off of the screen when switched on) and I love the Hawaiian influences found throughout the app, from the subtle background music featuring ukulele to the nods to island life in the alphabet: V is for volcano (which erupts), B is for Beach, and S is for Squid, to name a few. Here's a demo video from the developer:
The developer, Pi'ikea Street, also runs a blog with craft ideas for kids.
Buy Interactive Alphabet - ABC Flash Cards for iPhone, iPod and iPad at iTunes