FL390,
The PC-based flight sims are increasingly useful as procedural training aids (such things as dialling up correct radio frequencies, flying radials on VORs, basic flight navigation etc) but there is no substitute for actual time in the air.
Put the two together and you have a fairly good all-round builder of experience. Some training organisations do make use of PC-based sims for nav training and reinforcement of basic concepts, as well as instilling the idea of managing aircraft systems for operation of more complex a/c.
If the young man becomes very adept at the sim, it is highly likely he will pick up the skills of flying real aircraft very quickly. This may well see a reduction in his hours necessary to achieve various training milestones.
By all means sim away, but I'd urge your colleague to get his son into a real aircraft ASAP if he shows promise, committment and really wants to make a career out of it.