If cost is an issue, consider (Off Lease) computers generally 3 years old that come with windows 7 Pro for around $250 to $300 plus monitor.
We are currently replacing 100 XP computers with these and are getting them at Tiger Direct
I agree with the other experts; don't get him an Atom - buy a regular PC. A new computer with plenty of power, etc - although I hear you saying he's not a "big" user - really doesn't cost a lot as others have documented.
Something else to consider is a Mac mini. You can get Office for the Mac, they are pretty easy to use, fairly powerful, and Apple hardware is robust. They're not the cheapest system on the block, but sometimes you get what you pay for. OS X is a simple OS to use and he ought to find it that way; although it is different than XP. Still Office is pretty much Office and a browser is a browser and double-clicking is double-clicking. You can also put Windows on a Mac, although you do have to buy it separately. If you have an Apple store in your area, take him there and let him mess with one. Be aware that the newer version of Apple computers only uses 64-bit versions of Windows. And if you want Windows 7 - a move I agree with - make sure that you won't be forced to do 8. The new MacPros are targeted for Windows 8, but I think that's mostly because the whole set of hardware is so new and different. The last time I bought a Mini for work - a year or so ago, I was still able to use Windows 7.
The little Atom-based systems are actually quite nice, and work well with Windows 7 for internet/e-mail/Office use. HOWEVER, that's only true if you use the dual-core or better versions.
I agree, however, that for any uses outside of basic e-mail/Internet/Office you'd be better off with a small Core i3 based system. You can build a very nice (and tiny) mini-ITX based Core i3 system for about $500, including an SSD.
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I advise to go on the beaten path and get him a regular computer with at least a dual core processor and 4GB of RAM.
HTH,
Dan