Wow a bunch of other guys are into slot cars as well. I have been into them for about 2 years now and I have a bunch of them downstairs i have about 20 of them. My two favorite brands/sizes are Carrera and Scalextric 1/32 cars. I have F1's, sports cars, stock cars, and the big trucks too. Carerra cars are not the best racers, but have A LOT of detail and look exactly like the real thing. Then you have scalextric, they are great racers, all of mine are loaded with aftermarket parts, motors, wheels, tires, magents.
Carerra is a very good brand, and I think for your nephew one of their sets would be perfect. Does he like any certain kind of car? I wouldn't recommend a stock car set as they flip very easily. Something like the corvette, or VW Rabbit both are great cars. They have a lot of sets to choose from, and all of them come with different cars. Go for analog too, not digital. For beginners it is not a fun thing to mess with programming the track and everything like that.
SCX is a good brand too, I don't have a lot of experience with them, but their tracks looks to be a bit more durable, but not as quality like a carerra, or scalextric. I hope this helped and tell us what your sister ends up buying! Thanks..