My younger child (4 now) has a Nook Color she got as a gift a year ago, and has an iPad as well. It's pretty easy to control content by just requiring a password when you purchase something. She hasn't broken either and she's a pretty rough-and-tumble kid.
It has access to the internet through Safari, but she has not had any interest in that. She just likes the apps and e-books and I choose those.
I don't want to talk you out of your concerns. I just want to share my experience as a parent of a young child.
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