I'm asuming you mean when riding, rather than just looking for some comfortable underwear in life? :-S
Personally I ride in the same underwear that I wear daily anyway, which are cotton/lycra mix tight boxer shorts ( ala http://cgi.ebay.co.uk/6PAIRS-CALVIN-KLEI...1QQcmdZViewItem ) These stop things moving when riding which is what causes the problems. Some people prefer more conventional briefs (i.e. the more modern version of y-fronts) as these also keep things from moving
The thing he will ABSOLUTELY have to avoid is traditional loose fitting boxer shorts, or else he may aswell not bother at all. These allow bits to move about and then you can hurt yourself.
I'm not a bloke, but a laaddyyyy. I was just wondering how old is your nephew and is he sitting correctly. My young nephew (who is 9) sort of had the same problem and i explained to him to sit on his bum and not forward so he is on his bits.
I know it sounds obvious but when he thought about it, it worked and he corrected his seat.