7mm08 is just the ticket. Low recoil, and hard hitting enough for anything you want to hunt. Also readily available in a youth model with a shorter length of pull, you want something that fits him, IMO that is more important than the cartridge you chose. I believe Remington packages a 700 SPS with scope in a youth rifle.
Edit: Yup, here you go:
http://www.cabelas.ca/index.cfm?page...=1952&ID=36188
If you don't like the scope that comes with it look at the Vortex Diamondback, a great scope for around $250. Also nice that this rifle has a detachable mag, easy and safe to unload.