Moderation is key here. Our little one (2yo) watches a little tv, some days she gets none, other days (say, if she’s poorly), she might watch an hour or two. Quite often if we’re watching she tells us she wants us to turn it off! I don’t see the problem with it myself, but then we don’t generally have the TV on much anyway.
One DVD my daughter seems to enjoy is “March of the Penguins”, although she doesn’t really like the bit with the seal. We don’t just plonk her in front of it though, me or the wife will sit with her and respond to her comments, or make our own as we watch.