Bruce Pandolfini has one called Beginning Chess that is excellent. It is actually a book that you can use to test your progress as you learn and it really does a great job of showing why certain moves are better than others. It's a fun book to work through. Another very good book is a new one by Susan Polgar called Chess Tactics For Champions. This one really shows you how to be creative in your game play by creating forks, pins and skewers. She does a good job of explaining why some moves that look good at first may not be the best move. My game improved greatly after just going through the first 10 pages! I got both of these books at Barnes and Noble, but I have not seen another copy of Beginning Chess on the shelves lately. You may want to visit Polgarchess.com because Susan Polgar is in the business of teaching chess to children and her site offers alot of good books and videos.
There is another really good alternative for your nephew that actually may do a better job of teaching him the "why's" of moving the pieces. It's a software program called Chess Mentor. You can Google search it and find it. It is chess training software that comes in three options, depending on how much you want to spend and the depth of teaching that you want. I highly recommend this to you because it does exactly what you're asking for. It gives you a chess diagram (board position) and you click on where you think the best move is. If your wrong, it explains in great detail why you're wrong and lets you try over and over until you get it right. And then it gives a very thorough explanation for why it's right. But that's not all! You can ask for hints; either vague, more helpful, or obvious. You can also get a free trial download ( a very generous sample of the program). After I played with the free download I was hooked and bought the complete package! It's well worth it!
Another chess program you may want to consider if he doesn't already have it is Chessmaster 10th Edition ($20 at Best Buy). The tutorials are top notch and you can ask for advice during game play against the computer and a very natural speaking voice reads the explanation text for you. Just like having a Grandmaster at your side as you play!
Also, if he hasn't seen the movie Searching For Bobby Fischer, it is a MUST SEE for every chess player! An excellent family film. It is the true story of Josh Waitzkin (who by the way is featured on Chessmaster) and his becoming a chess champion at the age of...dare I say it...SEVEN!!!!
It's a great flick you'll want to watch over and over again.
Well, I hope you've enjoyed my recommendations. Chess is a beautiful game and clearly you are a pretty cool uncle to want to do this for him. Good luck!
I hope this was the 10 point answer you were looking for! :)