Backseat Driver app from ToyToyota
Backseat Driver is different from other driving games because it uses the handset's GPS and accelerometer to match in-game play with the direction and speed of the real-world car that the player is sitting in. In a nutshell, the player's car follows along behind the "Papa Car" (i.e. the real-world car), picking up goodies along the way by driving over them. Those goodies are matched to nearby landmarks in the real world -- so, for example, if dad drives by a burger joint, the player may be able to roll over a hamburger and gain some points.
Even though the game is intended for the fairly young, there's a social layer, too: players can share their high scores on Twitter, and they can compete with others via the game's online ranking system. And of course, players can use their accumulated points to customize their rides, just like in Car Town.
Backseat Driver is free to download [iTunes link] for the iPhone (3GS and 4), iPod Touch (3rd and 4th generation models), and the iPad. If you haven't upgraded your OS in a while, you'll need to jump to at least iOS 4.1.
Curious? Have a few minutes to waste? Here's a video overview. As long as you've got enough devices for everyone onboard, it looks to be a lot less disruptive than, say, punch-buggy.