yeah, the first thing my kids did when they came in to visit was start grabbing figures. True, chioices one and two were Mary Jane and Gumby, but still.
anyway, my recommendation for figures: Star Wars sucks. Really. They rarely stand up on their own, they don't pose very well, even with the joints that DO articulate, and their extras don't stay in place in their hands without help. I have at least three or four figures where I've had to TIE lightsabers into place. (heh, TIE).
anyway. GI Joe figures are good. They have less goofy modelling, their hands are more flexible than you probably remember growing up with, so they don't snap, they articulate in more locations, and they stay standing up even without a stand.
THe best are Marvel's Legends series. 6" scale v. 3.75" scale, better modeling, usually 30+ points of articulation. (Elektra, for example, has 38) and they come with displays. Most of the figures in those pictures are from Toy Biz (Marvel's toy company). Including the LotR figures, which don't move quite as well as teh superheroes, but are still cool.
The TMNT figures are pretty cool too, though they aren't as articulate. They do hold their weapons and stand on their own though.
Of course, if the kid wants Star Wars, well, you can't get Toy Biz Star Wars or GI Joe Star Wars. But still...