With a mere 500$ budget, I'd recommend shopping for openbox / refurbished items, and a 90$ mainboard is probably a bit too much for what he's doing, a cheapie ECS, biostar, pcchips or any other budget mobo would work about as good, for about 30$ cheaper..
total comes to 470+S&H.
You could swap for a 7600gt, but they're about equal in performance, but with the X1xxx series you get AVIVO (ATI Video in video out) which makes everything brighter, and videos play much smoother. You could also go to say an X1900gt or an x1950pro, but you're looking at ~100$ more, but the performance is like going from a honda civic to an acura NSX, or say a ford pinto to a mustang GT, you'll notice the difference.
If at all possible, have him save up an extra 150-200, you'll get much better quality products, such as a higher quality motherboard, and better performing video card.
If you're going over budget already, I'd double check with him and find out his absolute maximum budget (S&H and all) and see what components he's willing to drag over to the new build (hdd, optical, etc)
If we can re-use the harddrive and optical, you should be fine.
Any reason he doesn't use ATI? I used to be biased towards Nvidia after 3 ATI cards (on a failing mobo) caused hive cluster crashes in XP, then went to Nvidia and had great luck, but my new x1900gt runs great, ATI really improved with their x series graphics cards, I'd recommend at least giving the options, because you can get a much quicker video card from ATI for the mid-range than you can Nvidia.
E6300 is a great way to go, but on a budget system, I'd recommend 4300 instead. Look for the AsRock 775 C2D board, should be around 60$ newegg.
If you go with a higher video card, or more devices internally (fans, optical drives) go with a power supply with a higher 12V line, or multiple 12V lines (2 12V 14A rails = better than 1 20/22/24A rail, more stability)
Well, in either case, he'll have a good budget system. I still stress the point of finding out his absolute max budget. If he has to go mow lawns / shovel driveways, so be it, get him up to 650-700$, he'll be much happier.