This. Even in the "nicer" commercial/shopping areas on Mich. Ave north of the river, I wouldn't walk around alone at night. As for tipping, doing so in a restaurant or to a bell hop at a hotel or cabbie would be the only situations that I would think call for it. If he is going to be spending a lot of time downtown, he should also familiarize himself with the train system. It's not the nicest public transport I've seen, but it can get you almost anywhere you need to go, including the suburbs.
I wasn't aware that this word was used in such a manner in other countries, but I think your warning bares repeating. NEVER EVER EVER EVER USE THAT WORD. Even if he hears a black person say it to another black person, he should never use it himself.
Lighter note:
Make sure to tell him he needs to try authentic Chicago-style deep dish pizza. I personally recommend Gino's East just off of Michigan Avenue. mmmmmmmm.........
Pretty much all of this post, although I prefer Lou Malnati's to Gino's East; still, Gino's East is not bad (I had a bad experience with a hostess at one of their restaurants though).