look at the Raleigh Talus in a small frame. This will have the 26 inch wheels, but you can upgrade fromthe 2.0 model all the way to the 5.0 model. My oldest outgrew his (he jumped two frame sizes), and we went looking for another.
These can be had new for $350.00 on up depending on model and size. We ended up picking our boy up a Raleigh Talus 29er in a Large frame and our youngest a 20 inch BMX Giant (used) both bikes for $715.00 out the door. We dropped the seat all the way down on the BMK bike and added training wheels as the youngest is only four years old.