Think a little longer term. The iPod touch has a great chance to displace the Gameboy as the portable gameplayer of choice. You get way more processing power per dollar (and not much more expensive), a massive catalog of games, and services like this demonstrate other uses nicely. I would do the iPod touch version stat!
It's not a matter of 'longer term', it's a matter of suitability of the HW for the task at hand. The iPod touch / iPhone has small screen, which would not allow the book to be displayed in full glory along side the video, so no reading along for the child :(. Plus it doesn't support Flash, it would need to be a native app, hence taxable by Apple.
I'm not saying iPhone wont work at all, I'm saying there's probably an additional opportunity (maybe better) for a bigger device, designed specifically for the task, and sold at a healthy margin (people who go on lots of business trips normally have above average income).
