Spectronics, a company that focuses on Inclusive Learning Technologies, has put together this list of apps for literacy support. Not all of them are free, but they make great suggestions.
"Lexico-Cognition is an App to develop language understanding, vocabulary building, cognitive, memory and auditory skills in a playful way. It was developed and tested by qualified speech therapists. "
Learning in Hand features project ideas, classroom management strategies, and resources for teaching with mobile technology - including iPod touch, iPad, and iPod.
This is a great article about how iPads can be used with the writing process. It highlights best practices that teachers can follow in order to best leverage the technology, and suggests apps to support the process.