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There's no reason you can't let him play the Ibanez. If it's an electronic problem you can fix fairly cheaply...

Also, guitars are now DIRT CHEAP. You can get Fenders (from Mexico) for under $150. Just find one with a decent neck.

I'd suggest taking the Ib to a repair shop, having the elec problem fixed and getting a setup done on it. Polish it up, let him feast on that for awhile.

Oh Yeah, Jesus is Lord. ;-)

Again, this all depends on how much money he/you have to spend. I would recommend the Gibson Les Paul Studio Lite. This will cost around $1000. You can get a very similar model (but a much cheaper version) in the Epiphone lines, which will run $300-400. This is a good quality guitar for the price.

As for amps, get a midsized Peavey (sp?). That was my first amp and I could, in theory, still play out with it. It is very versatile soundwise and can get the hell beaten out of it and still work. Its never broken once.

Either way, you're looking at about $1000 total w/ tax. It sounds kinda steep, but it has always been my opinion that when investing in musical equipment, you must invest well, or you will end up paying more in the long run. Crappy equipment will always break and if he becomes serious, he's going to HAVE TO upgrade eventually. Good music equipment costs a lot for a reason. You might also suggest that he put all of his Christmas money in a bank account and follow the same game plan for his birthday. I did this for two years in order to pay for my electric drum set. It was well worth the wait.