Looking for recommendation - child's guitar

My friend wants to buy his 8 yr old son a guitar for Christmas.  It appears that a 3/4 size guitar is the right size for a child that age.  Any recommendations on  brands/models.  Budget is a concern, but sub $200 is doable.  Focus is mostly on play-ability and somewhat on tone.
 
I have see this particular one from Yamaha - JR1 but I am looking for other recommendations.  I'd love to be able to convince him to buy a Baby Taylor, but I don't think that's in the cards.
 
Thanks in advance.

The other curveball my friend threw me was he doesn't know if his son should play lefty or righty (which probably means lefty).  I will show my ignorance here and ask the question -
 
For a dreadnought style body without a cutaway or pickup, can it be strung either way (for lefty or righty)?

tlw,
 
Thanks for that info - I was pretty sure that would be the case.  I doubt we will use the Dick Dale option.
 
My buddy is going to hold off on this for X-mas, get him to play some guitar hero to see how he uses the controller and we might take him to a guitar store under the guise of me looking for a new guitar or something.  If we get him in a guitar store, we'll see how he wants to play.

Yep, taking him to a place full of guitars sounds like a good plan.
 
I'd second considering electrics as well as acoustics. It's not so much that they're inherently easier to play (just different), but you're much more likely to find an inexpensive playable electric (or one that can be set up so that it's playable) than acoustic, and the lower action and thinner strings are easier on the fingers, at least until the callouses build up, and a badly set up acoustic guitar can be murder to play. As JohnnyV says you're more likely to find a decent cheap electric than acoustic because with an acoustic the quality of body construction and the wood used is critical. With an electric the wood does make a difference but nothing like as much, and if you go for a budget "standard" design such as Fender, Squier or Epiphone then it's usually an easy job to swap out the pickups and hardware for something better later on (including better parts from the same manufacturer).
 
Just make sure whatever he goes for in the end is set up properly.

Check out Seagull. A bit over the $200 mark, but factory setup is good(playability), and they sound pretty decent.
Imho, Seagull smokes the "budget" range.
A 3/4 size may seem appropriate for an 8 year old, but consider that he will be growing rapidly over the next few years.
There is nothing more frustrating for a new player than fighting a bad guitar.

I bought one of these recently for a six year old:
http://www.ebay.com.au/itm/141279803967
Unfortunately it has serious intonation issues. At the octave fret, it's almost a semitone sharp. Therefore not recommended. If they redesigned it with a moveable bridge, it would work well.

Most learning guitarists will stop playing because of lack of callouses, so an electric would be an easier start for someone desiring to learn. If shy, an electric also makes less noise if unplugged (this is actually a selling point to people (usually adults) who want to learn without others hearing). Fret action will probably be the biggest hurdle in the beginning for him.
 
15 years ago I was in the same boat with my kids and after feedback on a newsgroup got a Kramer Focus 111s. It was $64, and came in a cardboard box, so I assumed it was a hunk of junk. Then I got the surprise of my life... perfect intonation from the factory, just the pickups had been recessed for shipping. I believe Gibson purchased them a few years later and they have since "disappeared." It is the only Strat-style guitar I own, so has gotten more use from me than the kids.
 
As far as an electric, something that is fully adjustable in the bridge (for intonation and string height) is recommended, just in case it is not properly adjusted at time of purchase. As far as the left/right hand thing... since he does not play yet, he can learn either way without issues. Learning right-handed would make it easier to learn music, as most is written for this, but is ultimately a personal choice (no right or wrong, just more convenient). Taking him to a good store with a big selection and letting him try things for feel is definitely worth considering.

Thanks for all the recommendations.  I talked to my buddy and he was leaning acoustic because he thought you needed the amp and cable along with the electric.  I pointed out that it wasn't the case.  We'll be looking at both electrics and acoustics.  It is clear that if we buy any of the inexpensive ones, a good set up and good strings will be essential.
 
More to come over the work break between X-mas and New Years when I get to do some research at the guitar store.

I actually have a practice amp that I can give him when the time is right.

dwardzala
So I took my buddy and his son to GC today.  The sales person was helpful. 

I just couldn't get past this and needed a strong drink. 

I purchased 10 used guitars in the past 4 years: 5 "beginner" electric and acoustic, 2 mid priced, and three 60s/70s guitars. All played like crap. No wonder they were being sold.
 
I took them to Elderly for set up and most all of them play fine now. Not all the necks could be made great. Most all are usable, a couple are good only below the 12th fret.
 
Three could not be fixed. The 60's Tulip needs all frets replaced. One acoustic is now set for slide, with a raised nut. The last needs some internal bracing repair.
 
My favorite to play now is the First Act m305. Cost me $25 and $70 for setup which included shimming the neck. (Also, I split the coils, added selector switches, and polarity switches. Way fun.)
 
Setup is imperative. Especially for kids' fingers. Light gauge strings help as well.

Yep, to Elderly in Lansing.
 
I have also had a couple guitars setup by the guitar dude at Music Manor.