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I'm in the same situation as you. Absence of 20+ years from N-scaling and just revived it with my 3 year old. I was afraid he was too young for this but surprisingly he can place the cars on the tracks with no problems and even handle the throttle like an adult. None of the either stop or either full speed syndrome that most young kids have. I too needed a portable setup. My plan is to get 1" foam and glue it to an interior hollow door and work from there. I will also put two small wheels on one end so that I can move the whole layout like a hand truck. Our place of running will be on top of a rectangular coffee table so things are at his level. One thing that I would HIGHLY suggest is DCC. Initially I used the buzz pack that came with my old starter set. That worked ok. Then I bought a MRC Tech IV 260 and that was an amazing upgrade. VERY smooth throttle and enough to run 5 locos on the same layout. After about two weeks I returned it and paid another $100+ to get a Digitrax Zephyr. Why? The ability to have both my son and I run locos at the same time is priceless. We were getting into situations where I would watch him run or he would watch me run. At first he was always the enigneer and I would be the switchman (all manual turnouts and he really doesn't understand the logic). That would be fine but soon we were both fighting for the throttle. [:D} That's when I decided it had to be DCC. Yes the initial outlay is much much more with the cost of the command station and getting DCC equipped locos or converting non-DCC locos to DCC. However, let me tell you the difference between a single engineer and both of us being the engineer. It is like day and night and my 3 year loved the fact that both locos can run in opposite directions. He pretends they are going to crash even though they are on separate tracks. Your layout looks good as I see two trains can run w/o crashing into each other. You and your son can take turns running the inside loop or outside loop or even work a yard (you'll have to add that to your layout) while one runs a loop - only possible with DCC. Well, you can do block control but your 3 year won't understand that and you'll always have to note where his loco is to flip the switches. Kind of takes the fun out of it in my opinion where you have to watch multiple locos to flip the right switches.
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