As somebody who knows...skip the traditional martial arts and get them into wrestling and Brazilian Jui Jitsu. Anything else will just turn into an embarrassing situation.
As with anything, YMMV. I've taken Karate lessons (specifically shaolin kempo) since I was 4 years old, and I couldn't be happier. Just pick something that makes sense.
100% agreement. Simple rule, if your martial art training's only form of sparring consists of defending against pre-defined attacks or attacks done at less than full speed, then it simple won't be effective in a fight. Also if you only learn how to hit people for points rather than for damage then chances are that's how you'll hit when you end up in a real fight.