Why would he buy a new mobo and new 2.5ghz processor when he already has a 2.9ghz processor capable of 3.1ghz? Doesnt make sense.
And why a new power supply? His power supply is perfectly capable of running at least a 4850.
I got the impression those were the items he was thinking about buying, not that he already owned them. If he does own them already then yeah no need to buy new ones.
HD 4850 or GTS 250 sounds about right for that res, then if you have extra cash upgrade the CPU to PII 720. Wait a week or so though to see if prices drop on the current GPU's out, the release of the 4890 and GTX 275 will put pressure on the current offerings to go down in price hopefully.