This morning at my Preschool Story Time I decided to try my hand at making an iPad flannel board for the rhyme "Five Little Turkeys". I used Software Smoothie's Felt Board app. It turned out pretty well I think. I was able to change the background of the rhyme, by a door, under a tree, etc. which I don't do with the traditional flannel board. The kids seemed to enjoy it, we took the time to count the turkeys, count down with our fingers, etc. They are especially enthralled with the iPad.
It's a pretty easy app to use. It has a lot of design elements available. I've also downloaded their Mother Goose on the Loose app (which is free!) and have made a few flannel boards using that. If you haven't looked into them yet, I'd definitely recommend them.