My son is now 8 and has enjoyed messing around with wood for some time. We have a rural acreage and a sort of shop building, so he's been in there. What he finds useful:
small hammer
small hand saw
rechargeable drill
screws and nails in a variety of sizes
a metal square (L-shaped ruler) for measuring
white glue and/or Gorilla glue
a small vise mounted on the edge of a table
a whittling knife
lots and lots of bits of "project wood" ... scraps of 1x2, 2x2 and 2x4, dowels, shims, detail bits like old offcut bits of molding, slats from demolished louvre doors, scrap bits of plywood (less than 18" in maximum dimension) and the like
kid-sized safety glasses
My ds has been left pretty much on his own to try things out and discover what works. I think that some occasional feedback and guidance from someone knowledgeable would have been helpful at reducing frustration ... but he's figured an awful lot out on his own!
Miranda