What is an inexpensive digital camera to buy for a 7 year old boy?"?

Check online for ones people are upgrading from. You should be able to get a used but still good condition camera at fire sale prices.

Looking at EBay, there were a number of cameras available with buy-outs under $50. At least he'd have an "adult" camera and it probably has features he could learn to take pictures with.

Check www.dpreview.com for camera reviews and features of different cameras.

FisherPrice makes one that is perfect...

Walmart has a 6 mega pixel for 70 bucks

circuitcity has some for younger children

You can find some great deals on refurbished older cameras in the 3-4 mega pixel range. Check some places on line like Ritz or Adorama.