Try Yeshivanet:
http://www.yeshivanet.com/faq/index.html
The filtering is done on a router that they control. It’s difficult to circumvent. You can make a white list, so ZD’s web store could be included.
As far as what to give the kid instead of the internet goes:
Ideally, we are all supposed to be involved with Torah and Mitzvos 24/7/365. No secular books or trips to stadiums allowed at all – for pleasure. Of course, nowadays most people are decadent to some extent, so we would go nuts without our various forms of fun and relaxation. The Torah concept is that pleasure is only supposed to come from accomplishing. A great person is someone who doesn’t need the secular books or trips to stadiums because he gets his pleasure from Torah and Mitvos. To the extent that a child’s parents live up to that ideal, that is somewhere around the extent that the child will probably live up to it. Mishnayos can be just as interesting and fun as a secular book – if that is the father’s attitude towards learning. Preparing for the Chagim can be as much fun as going to a ballgame – if that is the father’s attitude towards mitvos.
I only bring up this lofty ideal since the whole discussion seems to be theoretical. In the real world, you’re probably going to need to buy various forms of bribes to get the kid to do what you want.
The sad reality is that the minute you give the kid a library card, he has access to unfiltered internet in the library.
There are neighborhoods where the “bad friends and negative influences” are kept to a minimum. Perhaps ask yeshivanet in which neighborhoods their services are popular and try to move there?