Most Helpful Guy
You could try a used canon D50 or something like that.
Most Helpful Girl
There are several different kinds of cameras, but there are 4 main groups:
1) Point and shoot (P&S)
2) Micro four thirds (M4/3)
3) APS-C DSLR (lower end, referred to as DX by Nikon)
4) Full frame DSLR (higher end, referred to as FX by Nikon)
If he's pretty serious about photography, go for a DSLR. It's more expensive and can be over budget, but it will be worth it in the long run because he'd probably be moving up to a DSLR anyway.
If he's still playing around with cameras and not sure if he's going to be serious about photography, a high end P&S or M4/3 would do just fine.
If you plan on getting him any sort of interchangeable lens camera (#2-4), do buy a "kit" (e.g., the camera + 18-55mm lens) or a body-only with a separate lens. But make sure you have a lens, as the camera won't take photos without a lens.
For $400, you can't really get a good DSLR. If you're able to stretch your budget to about $600, the Nikon D5100 kit (with 18-55, basic lens) is great for beginners.
It has the same sensor as the semi-pro, $1000 (high-end DX) D7000 that I shoot with. Amazing color reproduction, very fast, quiet, swivel LCD, up to 1080p video at 30fps.. The list can go on. It's a very good camera for the price, especially if he wants to go further into the hobby.
The D3100 is not as great as the D5100, but it is only about $500. The D3200 at this point is a huge rip off, and it's nowhere near as good as the D5100 (in terms of ISO, color, speed, etc.--just because its megapixel count is significantly greater doesn't mean that it's better).
As for Canon, the T3i would't be a bad choice, but the D5100 is still a better camera. There's also the T3 and T2i, which are slightly inferior. I shoot only Nikon, so I wouldn't be able to give advice on this, but they aren't bad cameras. Canons are just a little noisier (especially in the focusing mechanism), and their controls are very different.
There's not much for around $400 in terms of DSLRs, but micro four thirds cameras are much cheaper. They may not be as good, and not as professional looking, but it's a good transition from P&S into DSLR, because it's as portable and almost as cheap as a P&S, but still gives you greater control over image quality, and choice of lenses.
Nikon's V1 has recently dropped in price. It's $500, but still a pretty good deal.
Olympus was one of the companies that started the M4/3 craze. The Olympus E-PL2 is a great little camera, takes good photos, and is under your budget ($350ish). The E-PL1 is also under budget ($250ish), but much, much older.
The Canon G12 is a high end P&S that is really great. It offers plenty of control and has a great sensor. It's also about $350.
If you need more information or suggestions, feel free to follow up on this question!
Also check out dpreview: link