Murphy Bed style fold up layout? - Model Railroader Magazine

Besides the John Armstrong plan, I recall several articles from the 70s in MR about flip top layouts.  One of which was an entire wall that rotated down.  When up it looked just like a paneled wall to the room with the operating pit covered by a picture.

On the HO vs O debate, either is probably good, ask him what he likes.  When I was in 5th grade (which would be about 10) I earned the money for my first HO train by selling Christmas cards.  Before that I had been building model rockets (which actually had to be built from balsa and cardboard back then).  Didn't take me long to figure out that launching & losing model rockets quickly burned through the money I earned picking up coke bottles for the deposit.  Model railroading probably has the highest return on the "play value" dollar of any hobby. 

My only point is, every kid is different and by 9 or 10 should be able to help decide which type of railroad he most wants.  Don't underestimate a kid.  My son, when he was five stringing his wooden Thomas track through out the house told me he did it because "trains go someplace, they don't run in circles."