I was faced with the same question not long ago. I opted for a folding Case "Peanut." A guy where I work was a Case dealer, so he had one with stag handles in orange for a decent price.

It is nice enough that it can be a father-son heirloom "first knife" if my son actually keeps it and doesn't destroy it, but not so expensive that I will feel bad when he inevitably does lose or break it.

It is a folding knife with two sharp blades that do not lock. I thought that a locking or fixed blade to start with would lead to him doing things with it that he should not (prying, forcing the blade...). I also thought all the tools on the swiss army knife and multi-tool would be distracting (based mainly on observing the other kids in his tribe with those).

Knock on wood, the boy has not yet cut himself on his knife. He has sharpened and debarked numerous branches and roughed out one pinewood derby car. The blades are still super sharp and he is very happy with his knife.

I started my sons out with tongue depressors, and a piece of sandpaper glued to a block of wood. I put tape on one end for a handle and had them sharpen the blade end on the sandpaper. I used the cub scout rules for handling a knife and enforced those rules strictly. I bought them a new Swiss Army knife, of their choice, and put it on a shelf so they could see it. The sooner they learned and could demonstrate the proper knife handling discipline, the sooner they could use their knife (under supervision). The knife handling rules were enforced whether they had a butter knife at the table, a saw cutting wood or a sharp knife.

They are very trustworthy now with any sharp utensil they use, and they enjoy their Swiss Army knife.