What I'd do if I had a kid:
1. Let him have an internet-ready PC in his room, with an XP guest account (admin account passworded), with Net Nanny installed. Make changes in the registry where he can't purge his internet history etc.
2. If the kid is clever, he might be able to circumvent the security of Net Nanny, so get one of the parents to check internet history daily, running processes etc.
3. Ground him if he abuses it.
4. Remove internet access if he abuses it once more. (by taking away the means of connection)
5. Remove PC from his room if found to be using e.g. a wireless dongle (perhaps given by a mate) in an attempt to get back online.
6. Don't give him a 3G-enabled phone until he's 16.