I concur with the dollhouse. Books on tape are great -- she can follow along with the storybook. DD loved that when she was 2 and 3 years old. Kept her amused and engaged more than videos...she just couldn't sit still long enough for the videos.
How about musical instruments like drums, a mini keyboard, a tamborine or a triangle. DD loved music makers at that age and would march around the house playing the music, having parades.
Puppets were also a favorite. We spent hours playing with puppets, having them act out stories we knew, making up new ones, just being silly.
DD also got her first real babydoll then -- not just cloth but molded plastic. She spent hours being a mommy, feeding her baby, giving her baths, etc.
Pots and pans and plastic food were also big. She got a kitchen set that year and we spent lots of time playing restaurant and house using those things.