<< The processor's your bottleneck there... >>
Not necessarily. The hard drive is the slowest component in a system. If he multitasks a lot and/or uses programs which demand lots of RAM, he could be using more than 256MB of memory consistently, meaning thath is computer is constantly hitting the swap file. If your computer is constantly swapping out to the HD, more RAM might yield more performance than a faster processor. Why? Because most of the time your processor is sitting idle waiting for information from the HD.
I know that was certainly true for me at least. Now that I have 512MB, it's no longer an issue though.