I ran windows 7 on a P4 3.4GHz no problem, but then it had 2GB ram and an HD4670 behind it. Dont know how well that system will cope tbh, especially if you want to add bluray as Temi_D mentions.
Ultimately if it's that expensive to expand the older tech, then your friend's probably best off investing in newer tech which will have some longevity to it rather than something which is already essentially obsolete.