The region around Princeton and New York is a bit underserved when it comes to kid-friendly rail attractions. If you're traveling by train from Princeton to New York, you'll take the "Dinky" (a NJT stub line that serves Princeton University) to Princeton Junction, where you'll catch a mainline train to Manhattan. You'll probably have to wait at Princeton Junction for twenty minutes or so. But your son will get to see a number of trains pass by -- including (if you're lucky) Amtrak's Acela, which rockets past at high speed.
Big model train layouts appear in Grand Central Terminal and the Citicorp Center every Christmas, but disappear by January. Unfortunately, the northeast's rail museums are mostly further afield (upstate New York, Connecticut, etc.) and the majority are only reachable by car.
The good news: your son will LOVE the official New York City Transit Museum, located in an old subway station in Brooklyn Heights. It contains an impressive collection of vintage subway cars you can explore, along with other exhibits adults and kids will enjoy. You can get there by subway from Manhattan. I recommend it highly.
The New York City Transit museum web site:
www.mta.nyc.ny.us/mta/museum
Since you'll be riding the subway, keep in mind that a few lines still use older rolling stock that lets you look out the front window of the very first car. It's a real thrill ride as the train speeds through the tunnels (which is why 'riding up front' was my favorite pastime when I was a kid).
Penn Station (served by New Jersey Transit and the Long Island Railroad) is sterile and boring. It's not worth lingering there.
But don't miss the amazing Grand Central Terminal on 42nd Street, east of 5th Avenue. Wander around, soak up the classic railroad atmosphere, grab some lunch on the lower level and people watch. It's a very exciting and atmospheric place.
If you have time, buy two Metro North Railroad tickets at Grand Central and take a spectacular trip north along the Hudson River. Sit on the left side of the train. The two of you can reach Poughkeepsie in under two hours, and then catch the next train back to Grand Central.
You'll also find two model train shops (Manhattan Train & Hobby; The Red Caboose) on West 45th Street, just off 5th Avenue. Drop in if you're in the area, just to see the selection.
Have fun.
[This message has been edited by dilly (edited 03-04-2004).]