My eight year old son and I attended the local train show last weekend and when we got home he pulled out all my old train stuff. We found a small place in his room to put up a 2' x 4' switching layout and I've got the board together and even have some track in place.
The biggest problem, though, is that with the track plan we have, there's not a lot of room for cars and an engine on the sidings. I have a 70's Mantua 0-4-0 tank switcher that would be the perfect engine for switching this track IF it ran well ( and it NEVER ran well as a switcher ). Even an 0-4-0 with a tender is a little too long for this layout. 
I'm looking for something similar in size, and it HAS to be a steam engine ( so my son says ). Does anyone have any suggestions on what I can use? I'd like to keep costs down, but I'm willing to pay a little more for quality... It also needs to be pretty smooth, since I know that if the engine is jerky and/or too fast that he'll lose interest.
THANKS!