After January 1st the rules for those monies eligible to be rolled in to a Qualifed Plan will relax and allow for rollovers of IRAs, 403(B), etc., but what about the client who terminates a
401(k) Plan and sets up a Simple IRA Plan. Can the Simple IRA plan receive the 401(k) rollovers?

No. Oddly enough, under EGTRRA, you can roll over a distribution FROM a Simple IRA to a workplace plan (assuming the 2 year period has been satisfied), but you cannot roll from the pension plan TO a Simple IRA.