That's a good idea (which I would have done to start out with had I of known) but this bike will be passed down to his younger brother (the 9 yr old) in a year or two after I buy the above mentioned nephew (the 12 yr old) a new bike.  Just replacing the derailleurs and shifters won't cost nearly as much as the new bike he deserves plus it will be good enough for the 9 year old to hone his skills on when/if he's ready.

The 12 year old has only been on a trail twice and he's riding like he was born on two wheels in the deep woods of Whistler or something plus he is showing real interest in the sport.  If he keeps up the interest then I am going to buy him the real deal in a year or two.