November I started using iPods and my iPad with some of the students in my school. I was not convinced that these devices were more than just mere toys/games. However I found that they were valuable when it came to the "word work" part of our new Daily 5 routine. When the kids were released to work on words they were working with magnetic letters, wiki sticks, dry erase markers and white boards, etc. There are plenty of apps in the iTunes store regarding working on words. Some are okay but I wasn't finding anything that was working on letters sounds.
Montessori Crosswords has the letter sounds. Instead of saying the name of the letter when you touch a letter it was making the sound. This was a huge find for me! My 5 year old knows her letters but we have begun working on sounds and the other apps didn't have the sounds in isolation. I have the Magnetic ABCs and really love it but it only says the letter name. Even thought this has a section where you can build words that are pre-created this app also has the magnetic letter feature that you can build your own words by the sounds of the letters.
I am still leaning towards iPads for K-2 because of the size of the screen for their little fingers and not quite perfect fine motor skills.