My son wants an acoustic-electric guitar. The one he picked out has a preamp. I know absolutely nothing about guitars, so does he need a seperate amp if this one has a preamp?
To answer your question: Yes, he will need a separate amp if he wants to plug the guitar in and amplify the sound.
A preamplifier (preamp) is an electronic amplifier that prepares a small electrical signal for further amplification or processing. The preamp is inside the acoustic-electric guitar (the preamp makes up the electric portion of acoustic-electric guitar) and allows for the acoustic guitar to be plugged into an external amp and make some loud noise.
Your son can still play the acoustic-electric guitar without an external amp, but the sound will not be amplified. If you are buying him a Fender Acoustic-Electric I recommend buying an external amp similar to one of these:
Note: You don't have to buy a Fender amp because you have a Fender guitar, but I personally like to buy the same brand just for compatibility reasons.
EDIT (Thank you JimR for mentioning this): Make sure you check out the Fender Mustang Amps. They are great amps at an affordable price