First, welcome to the forum!
As a fellow modeler that has expeirience with helping quite a few young children with O & HO trains, I'd suggest O scale, as that's more durable, and impressive to a kid. HO, however could be used, as long as your son is careful, and has a lot of help.
I model in O scale and N scale.
Lionel collector, stuck in an N scaler's modelling space.
Go with American Flyer - S gauge. American Models and S Helper (Showcase Line) also make American Flyer compatible trains which are more realistic looking. S, at about halfway between HO and O, will be an easy size for your son to handle and the oversized flanges make it easier to put on the track. Get your son some operating accessories. 12x18 will make a fine S layout.
See this site http://www.trainweb.org/crocon/sscale.html for what's available in S.
My son and I started out about 6 months ago, he'll be 6 in May. He understands that these are not toys and has actually done extremely well with keeping hands off. We have a 4'x8' double around with a spur off that of 2' x 16' or there abouts. I have him with a seperate hand held controller that he can operate his own loco with, while Dad operates all the big stuff. I've tried to make it so he can do his thing ( control his engine sounds ) giving him that freedom, but not uncontrolled freedom!
So really I'd say it what you feel most confortable with, and what you think your son can handle.
I would definately go with the HO scale..
the advantages are numerous:
already have some trains
can fit more layout into the available space
lots more available in HO than O.
better models. (HO is generally "scale"..while in O you get into the whole "toy train" thing..)
and I think the size is fine for little kids..and they dont stay little for long.
IMO there is abosolutely no reason to go with O scale..HO works so much better in your case.
Wow, two votes for S scale. I think S is a great size, matchbox and Hotwheel cars fit right in. Used American Flyer can be had for a reasonable price. That being said if you are just starting out and already have some HO, I'd do a 4x8 layout and see how it goes. There are some really great ideas at this site for HO layouts.
Alot has to do with your sons motor skills. Kids develop at different rates. I have two boys and they had no problem with N gauge when they were 5 yrs old. In fact they could put the cars on the track easier than i could. But N can be a little finnicky and frustrating.
This is a simple N gauge layout I made and the kids loved it. Its just a starter set oval with a big mountain and bridge added to give it some interest.
But when they are young I think they have the most fun running trains on temporary floor layouts. This is HO and O-27 on our living room floor.