make sure your nephew goes to some small shows/music performances soon. those 10k applicant deals are like staring at the grand canyon: you can't take it all in and you go away feeling overwhelmed and like you didn't get the whole picture. a small intimate cafe or nightclub like setting where the singer/band is accessible and more real can bring the situation into perspective. 
 
agreed with beepster: a local posse of musical buds to at least complain about how fake those 10k applicant sessions are and how they are going to make it the real deal.

craigb
I'd say his best bet is to avoid those 100,000 to 1 odds and create YouTube videos of himself.  It will allow him to showcase a lot more than a few seconds of his talents as well as being able to put all that you did about him into the description area.  If he's as good as you say, he'll start getting a following which just may catch the eye of someone that can get him a MUCH more intimate audition.
 
(Then, once he has that, he can get the girlfriend that screws everything up.  )

This ^^^

 Guitar Edge magazine had a feature on semi pro bands that do covers and all they do is perform at events just like the weekend bands in bars.  One group was raking in $4M annually. Many of them doing six figures.  I'd rather be those people.