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Erica Sadun got a chance to see Bartleby’s Book of Buttons a little while ago, and her writeup does a good job of explaining exactly what it is: an interactive book for children that uses the iPad’s various features to entertain young users while also giving them a fun story to read and explore.

Developer Kyle Kinkade also brought the work in progress to WWDC this past week, and we were able to see an updated build with a few new pages ready to read.

One of the new pages we got to see, for example, showed a ship’s portal window, and asked young readers to help clear up the bad weather and find an island in the distance. They could press a series of buttons across the bottom of the page to change the weather in the window (from rainy to snowy to clear), and then turn an onscreen compass (connected to the iPad’s compass feature) to make various objects appear in the portal — a ship in one direction and finally an island in another. Once the island was lined up and the weather was clear, the next page then opened up, and pressing another button moved the story forward.

Kinkade said that beta testing was going well (he has read the book with his own children), and that he’s been surprised by how adept children can be with the iPad. His 5-year-old rocks games like Fruit Ninja, and indeed, in playing with the book, it’s very apparent how young children would take to a device like the iPad more quickly and strongly than the traditional desktop computer experience.

Kinkade also pointed out that the Bartleby book is really an engine more than just an app. While the app itself is scheduled to be out by July, he’s planning to have “more than one book out by the holidays” of this year, and eventually the idea would be to use the engine to create any number of interactive books in this style, and not just children’s books, but textbooks and even books for adults. I asked him if he thought the App Store was the right place for this, rather than a bookstore like iBooks, and while he agreed that “it might be nice to have this in iBooks,” he had no doubt that Apple would make the right decision. “Apple will see this, and they’ll probably do something” — either create a special section in the App Store, or add a new area to iBooks for interactive fiction.

Since we were at WWDC, I asked Kinkade what he thought of the new 4.0 features he’d seen this week. While of course most of the specifics are still under the developer NDA, he said he’d been very impressed with the new gyroscope coming in the next iPhone — it’s been “a long time coming,” he told me — and that he was surprised by how much 4.0 had been refined since we first saw it way back when. “Folders have matured,” he said. “They weren’t resting on their laurels.”

Bartleby’s looks great. While you probably won’t be picking it up unless you have kids around the house, it’s a terrific example of where a device like the iPad can be headed: Beautiful, interactive content created specifically for the platform. We’ll keep an eye out for the app when it releases next month.