Adam,
Try taking off the pedals and lowering the seat so that he can touch the ground with both feet flat on the ground. Let him push himself around using his feet to keep balance. Once he seems comfortable try a small grassy hill for him to coast down still with no pedals. Let him get the hang of the balancing thing. Once he has the balancing thing down, throw the pedals back on etc. Good Luck.
Another thing that really helped my daughter was a Razor scooter. She rode that around and figured out that she could balance on two wheels and then the bike was no problem. She was riding w/o training wheels around 4.5 years old.