Please refer to the IRS publication 501 for reference - http://www.irs.gov/pub/irs-pdf/p501.pdf
You may claim your son - assuming he is a full time student and doesn't provide more than 50% support for himself. You do not need to report your son's income on your return.
As long as your son - as a dependent - earned less than $5350 (in 2007) - he does not require to file tax return. However if any taxes were withheld from his paycheck - he would need to file to get his refund.
Please let me know if any clarification needed.