I was debating before Christmas and chose the Nook Color over the Kindle Fire. For me it came down to three things: actual people at the local store if I needed help, multiple formats for books because I did own an off brand e-reader and wanted to be able to move my books to the Nook and the expandable memory - not sure I really need it, but it's nice to have the option.
If I were you, I might consider an I-Pod. If I understand correctly, any games/apps you purchase for your I-Pad and I-Phone can also be downloaded to an I-Pod. That way you're not paying for the same game/app 2 or 3 times. If you buy a Nook or Kindle you'd have to buy it again because it's a different format (I think ... I'm almost positive that would be true about the Kindle) An I-Pod would be smaller than the Kindle or Nook, but it might be something to think about.
Since I have the Nook Color, I'm not sure how easy it would be to access youtube and cartoons/movies. I do know that my 5 1/2 year old taught me how to play Angry Birds and knows how to open it if he's on the right page, but I'm not sure he knows how to get to the right page.
Added:
One other thing about the Nook over the Kindle. I read that once the Kindle is registered, you no longer have to enter a password and anyone can order anything and it is charged to your account. I have to enter my password anytime I order a new book or app. I even have to enter it to download the "Free Fridays" book. Your son wouldn't be able to accidentally run up your credit card bill!