My kids, at 4 & 7 are past this. However the recycling part is a good idea. I gave my kids my old iPhone 3's when we got new iPhone 4's. They've been beating on them, dropping them and generally not being nice and they're still holding up well for close to 1 year now. They both love playing games on them and both picked up the concept of a touch screen right away.
I can see apps for younger kids really catching on. Good on Fisher Price.
I let my 3 year old nephew play with my PSPgo, he loved it. Sure, he could only do the most basic game I had (Spyro), but he still could. I also taught him some basic PC children's games.
A iphone for a child? No problem. I'd suggest going for a cheaper alternative however, as a child doesn't need a 8-64GB MP3 player or a high speed 3G connection or to make phone calls.
Yes, but what about a couple of years from now when your contract expires and the iPhone7 is about to ship. That 3GS is worth less that your paypal fees on ebay, and there ARE a lot of good children's apps for the thing. That Alphabet train game and other learning/game items. My little girl got me in a bit of trouble when she figured out how to unlock mom's iPhone and rearrange the icons--just before she turned 1. Why not slap an old phone in a case and let the kid play with it at that point?
Why have a healthy toddler when you can expose it to phone antennas, all the nice chemicals the case is made of ect in a must have thing for a baby - The phone.
And that is now possible even before they matured! If they get cancer young they won't likely pester their parents for another phone because they are dead! I can see the sheep are gathering in line for the latest "invention".
I let my kids play with my iPod Touch all the time. They have some really nice apps for kids so they think they're playing when they are actually learning. I think it doesn't make "a whole generation of babis addicted to apple", it helps them also learn the touch screen and tilt features that you can find in almost all smart phones. In my opinion it helps the children learn the new technologies, so it's not much of a task for them to learn the newer technologies when they get older.