We were hacked. Several times over the past two weeks, in fact.
While all passwords are encrypted and salted, it's recommended that you change your password here when you can.
Enormous Hard Drives. An average workstation-type-thing only needs around 40GB. Get an 80GB drive.
Why 4GB of RAM? Hell, why 2GB? 1GB is enough, and even that has space to spare on a regular XP machine. Running IE, Word, and Excel at the same time doesn't require much.
With a processor that old, you could even get him an Athlon 64 X2 4400+ and he would be amazed.
I was suggesting a list that goes under his budget. I also don't have a good grip on UK providers for computer components, so the link was for informative purposes anyway.
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