Ouch. At the least, you can get a DSL router for him so the PC has to do less work firewalling out traffic

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You'd be wise to do that, and at the least drop some more RAM in there.
I have a Dell Pentium II 300 and Pentium III 1Ghz here at home. The only difference is I run a STB Velocity 128 in the older Dell.
If you want, I have an nVidia Quadro 2 MX card. At least that will make the video part less painful.