I agree with the large/heavy/misadjusted bike being a turnoff for kids. I'll never forget when I swapped bikes with my 14 year old cousin; he took my Cannondale MTB, I got his department store boat anchor. After a few pedal strokes he had this big grin, then he was gone! Wasn't sure if I'd see my bike again...Tried to get his working better, but it was in pretty sad shape.
Occasionally, small framed, fully rigid older MTB (13" or 14" frame) from a mainstream bike company like Trek or Specialized will pop up on Craigslist. These are quality bikes, if aged, and can be had for a couple hundred bucks or less. You can replace the knobby 26" tires with a set of easier rolling ones that don't have so much tread. If he's near 5' tall I think one of these would work as an interim bike. I'm always on the lookout for smaller bikes as I'm 5'3" on a tall day.
Last edited by rnorris; 12-10-10 at 02:51 PM.