I would suggest:
$166 - Intel Core 2 Duo E6320 Conroe 1.86GHz 4M shared L2 Cache LGA 775 Processor - Retail -
http://www.newegg.com/Product/Produc...82E16819115015 - Since you have a very limited budget you could go with a Pentium D - $100 -
http://www.newegg.com/Product/Produc...82E16819116253 – That would put you at $495 before shipping. I would go with the Pentium D unless you really think you need a Core 2 Duo.
$75 - ASUS P5L-MX LGA 775 Intel 945G Micro ATX Intel Motherboard - Retail -
http://www.newegg.com/Product/Produc...82E16813131041
$53 - Seagate Barracuda 7200.10 ST3160815AS 160GB 7200 RPM 8MB Cache SATA 3.0Gb/s Hard Drive - OEM -
http://www.newegg.com/Product/Produc...82E16822148230 - You could get a 250 GB Seagate 7200.10 for $70 if you need more space and can afford it: $70 -
http://www.newegg.com/Product/Produc...82E16822148262
$81 - CORSAIR ValueSelect 2GB (2 x 1GB) 240-Pin DDR2 SDRAM DDR2 667 (PC2 5300) Desktop Memory - Retail -
http://www.newegg.com/Product/Produc...82E16820145098
Onboard Video
$38 - LITE-ON Black SATA 20X DVD Burner -
http://www.newegg.com/Product/Produc...82E16827106057
$37 - FSP Group (Fortron Source) ATX400-PA, version 2.0, SATA, 400W Power Supply - OEM -
http://www.newegg.com/Product/Produc...82E16817104952 - This PSU will allow your friend lots more room to for video card upgrade(s) in the future for just a few bucks more when you caculate in shipping (it has more Amps on the 12V rails than the Antec).
$21 - Rosewill R6425-P SL Silver SGCC Steel ATX Mid Tower Computer Case - Retail -
http://www.newegg.com/Product/Produc...82E16811147072 - Pretty cheap case. If you can afford a nicer one it would probably be a good idea.
$90 - Microsoft Windows XP Home With SP2B 1 Pack – OEM -
http://www.newegg.com/Product/Produc...82E16832116056
That comes out to $561 (or $495 if you get the Pentium D) before shipping. That is about the cheapest computer you could build that is still pretty capable. Enjoy your build!
EDIT: Links should be working now.