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i3 for me due to price and performance at that price range
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i3 & 4GB would be my choice.
I would go for a G530 and an SSD. It will be perfectly fine for office work.
http://www.overclockers.co.uk/showproduct.php?prodid=FS-308-OK&groupid=43&catid=1798&subcat=
for an office machine,
unless he wants to join a domain then W7 Pro instead of W7 HP
for business dont cobble random components together buy a package, your friend will not thank you if he ends up with a machine that blue screens one a week...
expert here...... He knows the secret.Well guys, he wants me to come up with the best system I can with £650, I told him too much for his needs, but hey.
So Ive spec him a i5 2500k and a 128gb M4 ssd along with 8gb mem, 1tb hdd, 430watt corsair psu, gigabyte micro motherboard and a fractal design arc mini tower case.

Don't forget Office 2010 if he needs it.