Here are a couple of free apps I came across today:
Penguin Patrol: This is the ad free version and its price usually varies from $2.99 to $0.99 but it’s free right now.
iReading HD: The Emperor’s New Clothes: A variety of these storybooks are free right now. Just go to the developer page to find many more available for free. My kids really enjoy these storybooks and there is an option for Chinese as well for any bilingual kids out there.