The other day when I was in Walmart I saw a very cool case for your iPhone/iPod touch that is baby friendly. It's made by Fisher-Price and is not that expensive.
Here is a link to Amazon if you wanted to see reviews of this product: http://www.amazon.com/Fisher-Price-Laugh-Learn-Apptivity-Case/dp/B004UU9W78
The other case is more soft and cuddly. It's called The Woogie.
Here is a link to a website, I've not seen these in stores: http://www.coolhunting.com/tech/woogie.php
My 5 yr old is a bit too old for the Fisher Price case, though when we manage to adopt another baby that may be a good purchase for us. However, she loves the idea of the Woogie so I see myself purchasing this in the near future.