This app is amazing, I'm not sure it's for kids but my son loves it. There are three views of the piano:

1. Invisible: just touch the screen and watch it light up and play the keys, dragging your finger across the screen results in all keys being played, very cool.

2. Spiral: piano is in a spiral and the keys are quite large, easy for a kid to play.

3. Normal: see all the keys, zoom in and out to only display snippets of the keyboard.

There are also a few other very cool options. You can have it play certain songs, including twinkle twinkle little star and the moonlight sonata. You can play along as it tells you which areas of the screen to hit. I love this because I can sing to my child as we tap the screen together to the song. Really a well done application.

At  $.99 you can't go wrong, very stable.

http://magicpiano.smule.com/

http://itunes.apple.com/us/app/magic-piano/id356416346?mt=8