Konami's "Storybook Workshop" videogame for the Wii is the kind of videogame we could use more of.
It's designed for young kids, though it does have some mild cartoon violence, and is basically a read-along. There are 16 classic fairy tales here, like "Little Red Riding Hood" and "The Ugly Duckling" plus four sing-along songs.
Players use the included USB microphone to read along with, record and play back your reading of the stories. A voice box option lets you alter your voice a little to match the characters. You use the mic to record the stories (or you can listen to the computer). You can get about 40 minutes of storage.
The game helps reinforce reading skills and can help young ones with pronouncing their words.
In addition to the read-along there is some gameplay here, too, with some mini-games. The only bad thing here is getting started. A host character (a walking, talking television) leads players through a tree house with four rooms. In each rooms, are elements to begin the storytelling. If parents are not around, young kids could get frustrated trying to know which room (Grape) has the different characters, and which one (Acorn) has the tutorials and report cards.
Still, it's a nice deviation from most kids games and can actually help enforce some things kids are learning in school.