You need to figure out what games he wants to play, if he wants to play Mario, Zelda or Pokemon, then you have to buy a DS.
IMO, and I can't believe I am saying this, the iPod touch is better for a kid, it has educational apps and he could use it as a PDA to keep track of everything and to help with time management. The big thing here that the iPod has that the DS does not is educational apps, I feel the iPod does a MUCH MUCH better job in this category. They have educational apps for everyone from a small child to a high school senior and even for people in college. The DS does not have that.
If he doesn't have any taste in games yet I would get the touch, since the games are a A LOT cheaper and if you get a dud, you won't be out $30-40 for one game. Kids when they hate a game they usually won't touch it again after hating it the first time. I have been through it with enough cousins and relatives to know, you buy them a $30 game, they try it once, they hate it and throw it down (lovely, since games are not returnable once opened). Since you will likely be footing the bill for all the games in one way or another, this is something to consider. The touch completely removes this problem, so buying games is not a test of OMG I just spent $30 on this I hope they like it.
You can also get demo games for free on the touch, and a ton of games have free demo's so you can figure out if you like it before buying it. Nintendo does not have demo's of almost every game available.
Pretty much the only thing the DS can do is play games, the MP3 sucks on it and the camera's on the DS cannot record video, and are of much lower quality than that on the touch. Kids want to take pics and upload to facebook and upload videos to youtube, the DS does have facebook uploading but it does not have youtube uploading.
If he already has a home console, you might want to consider the touch.