Hi Justin -
If you want to really teach somebody about Linux from the ground up, I would print out the Gentoo handbook from http://www.gentoo.org
, hand it to them and tell them to build a system. Gentoo is ridiculously difficult to install all the way to a GUI, but they would learn a lot. Gentoo is a source-based distro and installation takes a very long time as you have to compile everything with Portage - their package manager.
If Gentoo is too difficult, have them start with Arch Linux from http://www.archlinux.org
. Arch isn't quite as hard as Gentoo, but is still a distro where one would learn a lot. With Arch, you get the Pacman package manager and everything is pre-compiled which saves a lot of time during the installation.
If you are crazy insane, or just plain motivated, try out Linux from Scratch: http://www.linuxfromscratch.org
I'm a big fan of Arch just because it's minimal, fast, and they have a first-class wiki at https://wiki.archlinux.org