Mountain Bike Help!

The actual quill and bolt seems to be fine. Suspecting frame trouble.

OK I'm not exactly familiar with that type headset. But I think you leave the large nut above the frame loose while you tighten the bolt in the top of the stem, then tighten the large bolt above the frame.

If the top nut won't tighten then undo it and see if the bottom part of the arrangement is stripped out.

I doubt the frame is the issue, and these parts are extremely inexpensive. It could be the inside of the fork tube. If it is then the inside of it may be worn. I'd try wrapping some electrical tape around the end of the stem that wedges upward and see if it will tighten up.

If the stem end is worn smooth then try finding a new stem that size. Nashbar doesn't have any that small, but amazon does. Although you need to know what size the handlebar is to buy one.

How tall is he? Might be time to get him a real bike! I happen to have one. This would fit from 5'0-5'6".
Since I posted this it has depreciated in half, looking at ebay.
So $800 as it could stand a tuneup : http://www.georgiapacking.org/forum/showthread.php?t=211299&highlight=trek