"Little Bird Tales: Capture the Voice of Childhood. We offer a fun,unique way to create,record and share stories online."
This looks like a nice site for digital storytelling. You can draw, type, upload photos and add your own narration. You can also access stories submitted by members. Free registration and access to public tales; there's a commercial side too.
There seems to be a problem with FlashPlayer 11.2 which they believe will be resolved when 11.3 is released.