I'd suggest getting an Antec case then, you can get a decent PSU with the case so that's two birds with one stone.
Antec SLK1650B Black Quiet Mini Tower Case - 350W SmartPower PSU (CA-023-AN) @ Price: £37.95 (£44.59 Including VAT at 17.5%)
For the money he's spending I'd probably recommend him sticking to an AGP system, but he might aswell get a decent motherboard anyway. So I'd recommend the ASRock 939 Duel SATA as it's both AGP & PCI-E @ £40-£50 (Not stocked at OC)
He may aswell get the SATA-II HDD for roughtly the same price as the IDEs.
Western Digital Caviar Special Edition 80GB 800JD SATA-II 8MB Cache - OEM (HD-023-WD) @ Price: £28.95 (£34.02 Including VAT at 17.5%)
For an extra £10, he could get 120GB.
The graphics card is his choice, a high end AGP or a low-end PCI-E...
AMD Athlon 64 3200+ Venice 90nm (Socket 939) - OEM (CP-131-AM)
@ Price: £67.95 (£79.84 Including VAT at 17.5%)
Corsair 1GB DDR Value Select PC3200 CAS3.0 Kit (2x512MB) (VS1GBKIT400C3) (MY-061-CS) @ Price: £47.95 (£56.34 Including VAT at 17.5%)
OcUK Gamer 198YP 19" LCD Monitor - Black/Silver (MO-015-OK)
@ Price: £144.95 (£170.32 Including VAT at 17.5%)
OR
Samsung SM-920N 19" LCD Monitor - Silver/Black (MO-043-SA)
@ Available This Week Only for just £149.95 +VAT.
And that's pretty much his budget there. Your friend wants an awful lot for his money. He'll still need to buy all the peripherals...