Android supports Flash from Android 2.2 onwards. However, Earlier versions can still play Youtube videos via the dedicated Youtube app.
There are some dedicated Android readers out, such as the newly announced Nook Color, but whether or not you can use the Android Market with them remains to be seen.
What you could do is just get an Android tablet, such as the, rather pricey, Galaxy Tab, then install the Kindle and Nook apps on it. He can then watch any kind of video he likes and be able to purchase books from Amazon and Barnes & Noble.