Rossetta Stone is about £500.
We found a BBC children's aid called Muzzy. Its a cartoon character from the 70's, and through 1 audio CD, 6 short cartoon episodes and a vocab DVD you get an intro to Italian for pre-schoolers. Unfortunately this was still £160 but we managed to pick one up cheap on Ebay. £25 pounds later and we have a not quite complete Muzzy Lv 1
Ellie likes the cartoon but I'm not sure how much italian she's picking up the DVD's seem very short