Wow... just scanned through the other responses...
My daughter is 3.5 and hubby just bought her an iPod touch (older generation for about $30--with a $20 giftcard for iTunes)! She has been playing on our iPhones for about 2 years (at first with strict supervision) and on the iPad for about 1 year (again, strict supervision at first). She also loves playing outside (and is currently fascinated with her new badmitton set), will "read" her books for hours on end, asks for her crayons, scissors, and paper every evening. So, I absolutely think electronics are appropriate toys and tools for a child to use! (Just think how far behind some kids are going to be when they start 1st grade and don't know how to use the school-provided iPads! *Yes, I am exaggerating, but not by much!*)
Okay, anyways, on to your actual question. For long car rides (and in my opinion, our previous commute of 45 min each morning & evening was a *LONG* ride), we bought a portable DVD player and some Dora, Diego, and Veggie Tales videos. Yes, we talk, and sing, and play games, and practice colors, numbers, etc... but sometimes mama just wants to drive from point a to point b without coming up with a constant stream of entertainment! That worked beautifully! Now that our commute is only 15 min, we don't even keep the player in the car. We now only use it when we do long-distance (>4hr) trips.
The iPad was a family gift, but dd very quickly learned how to play some games (started out with puzzles & noise makers), and is now into much more advanced games and learning apps (heck, this girl will point out where her lungs, gallbladder, liver, intestines, and heart are--thanks to an anatomy app). At bedtime, if we are watching a grown-up show, we will let her lay in our bed and watch her cartoons (recorded on our DVR) or a movie (downloaded from our DVD collection). Sometimes daddy lets her have the iPad in her bed to watch a movie, but that's usually on a weekend night and when we're watching a grown-up movie.
Now... the iPod. I didn't really agree with giving it *to her.* So, we told her that it's ours, but we will let her use it when she asks nicely and as long as she's been good. ("Good" means, no potty accidents, minding her manners, doing what we've asked her to do, keeping her room clean, etc.) It works. She loves playing games on it and figuring out all the tools. I've put blocks on it so no internet, downloading, or phone calls--but otherwise she has free reign! She loves taking pictures (of things & of herself), scrolling through the music library, and starting up whichever movie she wants to watch!
So, my vote is for an iProduct! You can find a cheap older-version iPod touch at many venues (we got ours at GameStop because hubby has a membership and gets great discounts).
Now, I would suggest teaching your dd that books are NOT to be torn up! We've only had 2 books torn and I took ALL of them away and gave a huge lecture! They were put away for a few weeks, and once returned, she never tore another page!