Android does have some great options, but as always, you have to play with it for a bit.
If I were going to give my grandparents a tablet, it would HAVE to be an OEM, with a PHYSICAL home key, no app-store custom rom, with reliable voice dictation and camera. I would set it up like this:
One page for shortcuts to emailing their loved ones. i.e., put shortcuts for "mail steve" that has the picture contact there. I'd do that for all of the favorites, and then I'd put an address book on the page. I think that the voice dictation button on the keyboard is important, and either Dragon or something else for the dictation. I'd also put a big mail widget with ONLY ONE email account on it.
One page for Skype/voice calling their loved ones. A big skype widget, and leave it set to be always on, and it can show them as idle after X hours
Another page would be just for looking things up on the internet. Big google search widget with a voice icon, a favorites widget, and a Firefox icon. That's it.
And a final page for photos and music, with an album that syncs to something that you control, like a web picture client (so you can send them photos that automatically pop up), and a simple music player widget for their tunes.
That would be the extent of it. I think that iOS is not a good platform for this, since the widgets (especially scrollable ones) are a great way for them to see exactly what they are getting into.
P.s. I'm still rocking the Touchpad, just left my palm pre for an android. SO awesome. The touchpad is not a good option for your folks, because the camera and voice dictation are busted.