There's not any reason you even need a 500W PSU - with any reasonable video card, that system will never pull anywhere near that much. I'd bet money it won't break 300W under load. Right now, I'd grab this Antec
, as it's a decent unit and a good price. The EarthWatts 380W
might not be a bad choice, either.
For the video card, I'd go with this 6770
if you're looking to the higher end of the budget, as XFX has one of the best warranties around and the 6770 should be plenty fast enough (and anything faster would be held back by the CPU anyways). A 550Ti
would be another option, little pricier and a little faster still, but if he wants something from the nVidia ecosystem (CUDA, PhysX, etc), it's the only decent option around that pricepoint. On the lower end, this 6750
is probably the best value you'll find if you don't trust rebates, or this 6770
if you do.
In terms of compatibility, the specs page there indicates a PCI-e 16x slot should be free, and someone on Newegg claims to have replaced the PSU so I am pretty sure it's ATX-compatible, so you should be set on that front.