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.