Hi Dbat,
There is this site, wrightslaw, I googled wrightslaw georgia
http://www.wrightslaw.com/blog/?p=67they might want to read up to learn more.
If I could go back in time with my DD, she had been in a school with good communication (meaning when something happens they have details about when and what) and nice attitude from her school, such as what you report the teacher is like, AND lived in a state where gifted ed were mandated I think I would have prefered the IEP route. But I would have wanted the gifted ed needs being met as part of the package, because those needs to need to be met for these kids - the higher the "G" the more crucial. DD never hit anyone though, she mostly broke down crying, or argued her teachers into a circle (her reasoning and verbal skills are off the chart, which isn't an excuse, but adults get caught up in it, forgetting her real age).
I can understand his parent's concerns very much. It might have been legal in the past for schools to say "medicate or you're out" but it's not now, but parents need to really know the laws and their rights and how the process works in order to stay on top of it. Have they spoken to their pediatrican yet? Drs or practices often have a base philosophy and your nephew's parents could see if they believe the doctor would support a no-meds approach. Also don't choose a psycholgist etc. from one of those large practices that is known for churning out the diagnosis and meds. There are usually ones with that reputation in every city/town.
If they choose to homeschool until he outgrows this as they did (keeping in mind school environments are so different now, so regulated and stressful due to the performance mandates etc.) I don't think he'd get that behavioral reputation. He might have similar issues though if he goes to group homeschooling activities, but it would be more manageable.
Also of course look into diet and allergies and exercise for ways to help him be calmer more over all. All that junk like the dyes and HF corn syrup in kid's meals (maybe even in school lunches still) really can aggravate/agitate more sensitive kids.
