My son and I are both perfectly happy with the Xenon. That's not to say that the iPhone is not better, much better, when it comes to the touch screen. But we don't care. I'm fine with the touch screen, it works for me (except if I'm trying to do something I shouldn't when I'm driving---I know....). Otherwise, it is fine. If you had a choice between a Xenon and an iPhone, probably the iPhone is a much better phone. But you're not having that as an option. I think, for your son, having had nothing before, he will love both phones.
My son LOVES his phone. I'm very happy with mine but you should have seen the bare-bones phone I had before that!
If you do get the Xenon, I highly recommend buying the hardcase at the AT&T store. It fits on both pieces and helps an awful lot if the phone is dropped. Also keeps it from getting scratched up. For the screen, I bought the screen saver plastic sheet. If you buy it all at one time, the store will usually give you 30% off all that stuff.