The important part is not for you to win but for him/her to learn
Playing children

Obviously I don't care about winning. But I don't want to do stupid moves just to allow him to win as I don't think that teaches him anything. So I guess my question is what is the best way of encouraging a child to play to the best of their ability, learn to play better and not be discouraged with losing.

Don't give up your winning plans, so you both could analyze the game and show him what was his mistake.

I think take-back games are great for beginners in general, I remember starting with them. But it's important to make the step to no-takeback games one day, 'cause you do get careless if you know your mistakes will be forgiven. So I think takebacks and carefully explaining why that particular move is better is good.
Is there a way your son could play with other children? It might be good to look into chess clubs with a youth program, or perhaps a school club. It's really encouraging for kids to see they can beat (some of) their peers.
You can also try giving your son some easy tactics puzzles, one or two moves at most. There's plenty of printed boooks on chess tactics for kids, or you could try chesstempo.com (set the difficulty to easy and get the first ten puzzles wrong, and it goes down to a level where most of the puzzles are about taking a hanging piece).

Don't give up your winning plans, so you both could analyze the game and show him what was his mistake.
I'm not sure that's the best idea. If you play someone much weaker than yourself, I'm sure you'll profit from many mistakes and end up with a 30 point difference and a checkmate. That leads to humiliation rather than lesson learning. Children don't take that very well, well mine doesn't!

He does play with other children at the school chess club. I was just looking for ways for him to play an adult without getting discouraged and helping him to learn to play better

The relationship issue is important. He has to see you as his coach (the all powerful figure who he hopes to beat some day)...once this is established, he will understand that playing with you is more about learning the game (so don't worry about handicaps). Let him play with kids his own age (this is where he will test himself).
As his coach you are there to teach and encourage. There are a great number of books on teaching chess to kids.

Hello xml,
I began playing Chess as a child. My father, AL State Champion 1978, introduced me to Chess so that I would have the opportunity to exercise my mind; thereby, to facilitate the growth and development of my perception and rationality of decisions in contrast to repercussions.
As a child of Chess, my father's primary lesson was to teach me the understanding of fortification.
I believe now, that when teaching a child to play Chess, you are teaching a child to understand balance. My son is five years and five months of age. For my son, I have begun introducing the concept and beauty of the game of Chess; that the seed may be planted in his malleable youth.
I sincerely am glad to know that you are exercising the mind of your youth with the art of decisions. I hope that my words may be of some use to you.

Hi blueroseredmoon,
beautiful words, I'm not exactly sure how I turn them into practice though!
Cheers.

A number of balancing mechanisms are described here ... handicapping-systems---levelling-the-playing-field. I think there is something to be said for playing SOME games with a handicap so that your son has a reasonable chance of winning.

He destroys me in fifa 09 and refuses to give me a 5 goal head start which I need, so maybe you're right!

that's a great article artifzz, thanks. What I'm looking for is a motivational tool, I think. Personally, I'd quite like to play some handicap tournaments on chess.com so I have a chance against some 2000+ rated players, so maybe the same thing would be good if I played my son that way.
I actually just gave thim the choice of what pieces to take away from me to start a fair game, and he took my queen and two rooks, but I stopped him there before he stripped me down to a king only...

He destroys me in fifa 09 and refuses to give me a 5 goal head start which I need, so maybe you're right!
Tragically, I am right. Kids will will crush you all day. Then, when you cry "I give up!", they'll mock you as if they just stepped in poop!

I don't know beans about kids even though I used to be one, but I tend to dislike the entire idea of takebacks, even in training, unless it's not an actual game. I think it would be better, if you can get a kid to do this, to require him to tell you his thinking on each move (even on book moves) and why he is planning of making the intended move. That way you might could direct his thinking down a realistic or logical path. Takebacks only develop carelessness and insouciance (in my opinion).

He destroys me in fifa 09 and refuses to give me a 5 goal head start which I need, so maybe you're right!
Tragically, I am right. Kids will will crush you all day. Then, when you cry "I give up!", they'll mock you as if they just stepped in poop!
Look at Post #9
MikeGrattage is your dad, get_lost? Kids are just mean-spirited!
Does anyone have any advice about playing chess with youngsters? Currently I play my son without any handicap but just point out any mistakes and suggest takebacks (and usually lose since I remove all my tactical advantages!), but I wonder if playing with handicaps is better. Suggestions?