If they're strong storytellers and they can handle "living worlds" a game based around a city on an island is great. All kinds of interesting terrain, interesting encounters, assorted factions to negotiate with / be friendly towards / ignore / murder. It's also of limited scope: sure, the outside world is there, and you might need to go to the cave of excellent adventure on quest for theodore and william, but everything you need's in the city.
I've thought a couple times about adapting Morrowind as a campaign setting--a bunch of cities, a bunch of ruins and tombs. If they've got games they like or a setting they like, see about helping them make a world in that spirit (or expressly in that world in an alternate time or some such).
Far as tracking statuses and init, I keep a little scratchpad with me. Dry erase is another great way of handling it. Magnetic boards. On init: if there's a group of goblins, I have them all go on the same init. Simplifies the game. Goblins on wargs would have their own init, etc.
If they've got a laptop, having the SRD available gives them click-click-click access to any rules they're unsure of, along with "standards" for skill checks. Balance, for example, gives the whole collection of modifiers and standards. The less they need to keep in their heads regarding the rules, the better. Their heads are where the game happens.