For I kid that age I would definitely recommend O or O27. You must also consider: Your budget, steam, diesel, or electric locomotives, and freight or passenger cars.
If you're willing to spend a little more might I recommend MTH? Many of even their basic sets often have protosound (fancy sound system for the uninitiated) and/or protosmoke (a fan-driven smoke system that produces voluminous amounts of smoke). Lionel basic sets usually have just the draft or pump driven smoke units. They won't have railsounds (lionel's proprietary sound system) but they usually have a horn or whistle. Most of these sets come with their proprietary roadbed track systems. These look nice but they cost more to add on to and I found them rather noisy and unreliable. The rails are also not galvanized like traditional track is so they rust sooner. I have used my traditional O27 track for years without issue but I stored my roadbed track for a few months and came back to find it covered in rust.
Another company you might want to consider is Williams. Their trains are built like a tank and have a few features (not as many as MTH but enough to please the average kid) and the price is decent. A few years ago the company was bought out by Bachmann, and while I wouldnt touch a Bachmann trainset with a mosin nagant bayonet the Williams line has not suffered in quality since then. So for entry level train sets your choice is:
Lionel : lowest price, lowest features, Greatest selection, most costly accessories
Williams : Medium price, medium features, lowest selection, cheapest accessories
MTH : Highest price, Most features, medium selection, medium-priced accessories
