This isn't an app suggestion, but a usage suggestion.  Before you go, look up the addresses and phone numbers and other pertinent information of places you want to go.  Put them in your Contacts under a separate group called "Trip" or whatever you wish to call it.  Then you can look like a rock star to your family as you pull up directions and contact info so quickly it will make their heads spin.  I did this when I took a group of youth to New York City last summer (along with a NYC transit app) and I never needed any maps or tourist books.

Being an app junkie, I'll actually answer your question.

-Family Feud: May sound dumb, but can be a good little game to play while driving.  One of the kids can read the questions and the whole fam can shout out suggested answers.

-Rock Band or Guitar Hero: Plug the iphone into your stereo's AUX jack and it's like you're kids are in control of the quality of your road music.  If you don't like the lame song-lists on GH and RB, try Tap Studio.  It's free and you get to load your own music.

-I use an ipod touch (and not an iphone, because I'm cheap) so I'm not sure if it would work...but try streaming Pandora through your stereo.  If that works, you might as well try a radio app (like I "heart" Radio).

-Flux Capacitor: This isn't really that fun, but it's pretty cool to have in your car...especially if you have a clip for your iphone for your dash.  Basically it's an animated Flux Capacitor from Back to the Future.  You can pretend you're not only going on a road trip to a different location, but to a different time as well.

"Letter Tracer" by Niftybrick Software is my 5-year-old's favorite. She also likes "Teach Me: Kindergarten" by 24x7digital.
DoodleJump and Plants vs. Zombies are fun for everyone.

Hey Bertsch, I wish you would've brought this up on Sat. and I could have shown these to you. The favorites BOTH our kids enjoy:

DoodleJump
DoodleBuddy
SheepLauncher
Shrek Kart (new)
Labyrinth
LunchBox
Frogger
Booooly!
& Thomas

Most are free or have free lite versions to try out.

They like iFart also, if you deem appropriate - might be fun for all toward the end of a road trip, especially if you eat beans or broccoli along the way, as you can record your own farts and "plant" them on others. Priceless.

Maybe you should get them some books.

My 4-5 year old really enjoys playing Teach Me Kindergarten - she's actually learned quite a bit of math and reading from this app. I'm impressed with how comprehensive it really is. 

I know it's late...but perhaps you'll find this useful in the future :)