Best advice, IMO. He "needs" a phone with a camera and mp3. Riiiight.
I don't mind if he wants a nice phone because he "desires" it and his parents spoil him. I mind it when people say they need a $250 phone for bullspit reasons when that's not the reason at all.
Basic human needs. Clothing (because no one wants to see you butt nekkid), water, and food.
A cellphone is a want. Its like wanting the newest stuff. For example, I want a Core 2 Duo for my computer, but, knowing that I cant afford it, I'm squeezing more life out of my Pentium4 (ocing is fun.)
If I were you personally, I'd just find a cheap phone and use that. Chances are you wont really ever use the camera, and a cheap iPod shuffle is great and about as functional as a MP3 player application built into a phone. I mean, are you really going to constantly use the 3G internet on it? I know I wouldnt want to surf the net on that microscopic screen. Cell phone cameras are junk, even if they are 2 megapixel, due to having no flash, so its very hard to get a good picture. Besides, with the more expensive phones with 3G, it probably starts to get real expensive real quick with all the ringtone downloads, video/audio streaming content, data rates, etc. I know my friends little brother who is 15 had a 3G device, and ran up almost 500 on the phone bill, so it was taken away and now he has a pay-as-you-go thingy.
But I'm not trying to lecture you though, I'm just giving you some insight. The pay-as-you-go are pretty nice too. They used to be crap, but now they're starting to look pretty nice. I'm thinking about buying one so my job can get ahold of me when they need me.