I second the compass and 550 cord.

I'd stick some waterproof pen and paper in there for sketching and whatnot, water bottle, small guide to local wildlife, compass of course, bandaids, string, second on the little led lights. my first pocketknife was a little victorinox classic. good for kids cause you can't do too much damage and they're cheap. my dad always had one in his pocket; thus began my fascination with knives. nice thing to do for the little guy.

How about a cheap SOG fast hawk. I would also add a small tarp and cord so he can practice making shelters with it.

I reuped the kids Adventure kit. A 50 oz water bladder in the backpack. A space blanket, a fox whistle, a SAK (purple flowers girly knife), A spork, a Booda bowl/cup, a small LED flashlight, A $5 headlamp, A small FAK/ BooBoo kit, a specimen tweezer (10 inch) a folding magnafying glass and a backpacking trowel.

Lots of great ideas here . How about a telescopic walking stick . That way it will fit him for a long time and they are nice and light .

Dang guys I gotta get busy on this. You keep giving me so many good ideas. Thanks again for all the help.