My son recently bought an iPod touch with money he made selling his homemade bracelets. He hardly has any music on it, but he loves all the games. He isn't able to "buy" anything without me putting in a password. I am not strict about it being educational, but I do rely heavily on the ratings that the games are given. If it says 4+, I don't even check it out. If it says 8 or 9+, I read through the description, check out the screen shots, and go from there. I don't like guns, so anything with guns is out.
I'll admit, I like playing the games sometimes too! Bejeweled is a big hit with all of us, and it sure helps the time pass while I'm waiting in the car for him to be let out of school.