Yes, i think all branded computers are overpriced and thats why i always build my own pc. If you are building a gaming pc i would suggest getting Intel cpu. Also Ati gpu's are bad with drivers which can cause problems with full screen.
It's a fair bit slower than the 7870 but also a lot cheaper and comes with two games. Speed is not a huge difference at 1080p because both cards are high end cards and will just about max any game.. really i'd only consider the 7870 (+$140, about double the price) if you REALLY like computer games or are using a larger resolution.
congrats on building a computer! It's really easy, I mean if you can turn some screws to screw down a motherboard and plug the other parts in the correct slots then you're able to build a PC.
If you need to reduce the price a bit more the CPU he listed has a few slightly cheaper alternatives. Really it's just about the best gaming CPU you can get but you definitely pay a price premium for it.. so there's room to scale down and still have a quality high end gaming PC.
BUT if you can get to a micro-center that is indeed a great non-sale retail price for that chip.
That is assuming he lives near a microcenter as those are in store deals only. Otherwise, that comes above his budget.
It's merely to be used as an example. I'm sure he's capable of going to newegg or amazon or whatever other vendor he wants to use and punch it in.
Even if you add $30-40 to make up for the newegg price difference. That does not put him over budget. The mobo and cpu cooler are the same price on newegg +/- $5. This still puts him under the $1000 budget.