I'm going to try giving my daughter Dora the Explorer Snow Princess game for Wii for xmas. She'll be about 3 1/2 by then and can use the Wii remote for bowling, golf and tennis in Wii Sports.
Vid, you said you gave your son Diego when he was 4. How did he like it?
Daughter... she still can't play Wii Sports well enough, but can rip through the Diego game. She loves it. It's basically a very simple platformer. You go left and right and occasionally jump over obstacles, climb ladders, etc., and there are hidden prizes. There is no instant-death like with normal platformers -- it's very forgiving. Plus, the objects are easy to find. For small kids, it needs to be not so ambitious, so it works well.
I think as she gets older, the Wii will be a good system for her, but so far, she's not quite there... except for the Diego game!