A product that has been great for Spencer, and now Garrett, is the VTech family of V.Smile products. We have had the V.Smile TV Learning System for two and a half years now, and the "games" for it are great learning tools. Better yet, we picked up a V.Smile Pocket - a handheld game system - that plays the same cartridges as the V.Smile system.
What's most interesting is that the V.Smile is just a retooled Super Nintendo, and the V.Smile Pocket is just a Gameboy retool. Ingenious way to save money and tap an untapped market by innovating "down" the chain.
All the games in this space focus on counting, letters, words, logic puzzles, problem solving, and trivia. I highly recommend the V.Smile family of products (we have the Art Studio and Garrett loves making pictures).
Now if only XBox 360 would create some educational games I would have an excuse to go buy one...