If someone handed me some money and told me to build it now, here is what I would go with. We need to know whether he needs keyboard, mouse, speakers, etc...
256mb pc2100 crucial from crucial.com using anandtech discount in hot deals... 32.75
the following newegg order, part by part, shipping he will have to find himself, was 44 bucks for me:
ENLIGHT EN-72370X3C4 MEDIUM ATX TOWER CASE with 1 Internal CaseFan - OEM Recommended by AMD and INTEL Pentium 4 Ready with 300Watts Power Supply, 4 5.25" Bays, 2 3.5" Bays & 1 Hidden 3.5" Bay (Click here for Cooling Devices) N82E16811116119 $47.00 $47.00
ECS K7S5A SiS® 735 SOCKET A MOTHERBOARD - RETAIL with On-Board LAN Port and Sound 5 PCI Slots, 1 4X AGP slot, 1 AMR slot. 2 DDR DIMM sockets and 2 DIMM sockets support (can not be used simultaneously). Two 184-pin DDR SDRAM (DDR200, DDR266) or Two 168-pin 3.3V SDRAM (PC100, PC133). Maximum: 1.0GB (DDR or SDRAM). Supports all AMD XP Processors. N82E16813135102 $57.00 $57.00
OEM ATI RADEON 7200 64MB 4X/2X AGP - OEM The RADEON 7200 is a 64MB SDR (Single data rate) graphics board, and offers such features as hardware transformation, clipping and lighting (T&L) geometry, CHARISMA ENGINE, and an on-chip harware DVD decorder. The RADEON 7200 is based on the RADEON 7200 chip. N82E16814102191 $59.00 $59.00
AMD Althon XP 1600+/266 FSB PROCESSOR CPU - RETAIL 1600+/ 1.40GHz, AX1600BOX. 3-Year Warranty. With heatsink and cooling fan. The Ultimate Digital Media Experience in an x86 Platform.Tailored for Microsoft® Windows® XP. Featuring QuantiSpeed Architecture for Rapid Execution of Applications. Tomorrow?s Technology Today. The Power of a Reliable Partner. N82E16819103304 $139.00 $139.00
MITSUMI D359M3 FDD 1.44MB 3.5INCH - OEM N82E16821103104 $9.00 $9.00
WESTERN DIGITAL WD200BB CAVIAR 20GB - OEM 3.5 inch EIDE Hard Drive WD200BB 7200rpm Ultra ATA 100 - OEM VERSION - Drive Only - Three Year Manufacturer Warranty - (Click Here for IDE cable) N82E16822137116 $77.00 $77.00
Zoom 56k V.92 PCI Modem Voice, Data, Fax, Voice Mail, Plug and Play, Internal Model# 1120M N82E16825115106 $22.00 $22.00
LITE-ON LTR-12101B 12x10x32 CD-RW - OEM 12x record, 10x rewrite, 32x read, includes CD Creation
Software - Click Here for Blank Media N82E16827106149 $67.00 $67.00
AOPEN CD-956 56x CDROM - RETAIL Internal EIDE, with User Manual and Audio Cable N82E16827132001 $28.00 $28.00
Subtotal » $505.00
shipping about 45...
memory 32...
so about 585, find a monitor, keyboard, mouse, speakers, and the OS.
seems kinda high for your pricerange, but see notes below.
Notes...
the motherboard has integrated sound and network interface card
using his old floppy would knock off about 10 bucks
dropping the cdrom and just using the one drive (which would suck for copying cd's, but would be okay for everything else) would save 30-35
Dropping down to a 5400 rpm maxtor 20gb from newegg would save about 15
dropping the processor would save some money depending on what. the 1.2 ghz tbird is 115 as opposed to 139.
video cards are one of my worst areas, changing the video card would save some money, if you wanted to go that route. Im just going with the underdog in this ati/nvidia thing, so the video card is pure personal preference. Sorry for the bias.
Hope this helps you out, newegg is a great site, as is mwave, and a couple others. Note I did not try to find the lowest prices, I just went straight through newegg. KISS is my motto with these kind of things, at least when I know newegg is just about the lowest most of the time, especially if you count saving on shipping because of the amount of items you order in one place, as opposed to spreading it out.