Puzzle Kidz is a nice iPad app for creating jigsaw puzzles for kids. The app allows you to take pictures with your iPad and turn them into puzzles. You can also use stock images from Puzzle Kidz. The app offers three levels of puzzle difficulty to that you can create a puzzle whose difficulty isn’t too hard or too easy for your child.
Puzzle Kidz costs $0.99. It does not offer an in-app purchases or advertisements.