A guy on dragons' den brought something similar on, an i-bear. This was a teddy bear, with an mp3-mp4 player built in. The parent can register the chld on i-tunes, and upload bedtime stories, music, etc.
My concern was that, as the children the inventor was aiming the bear at were not old enough to know how to operate an mp3 player, who would buy it?
Surely you would be better off buying a regular gadget?
p.s. wonder if the shaun the sheep one has anything to do with the guy on dragons' den? His was patent pending.