ABC Go is a great alphabet app made by Peapod Labs. This would be a good app for students in Kindergarten and 1st grade. The app is available for the iPhone and iPad. It does cost $2.99, but is worth the purchase.
Students can explore the app's them (go) by scrolling through the alphabet. Once an image is selected, students can manipulate videos and images related to the word. You can click on a letter to go to another series of images.
Peapod Labs has a variety of ABC apps that focus on different themes, like the farm, music, and actions.