OblivionageForget a new build just grab an 8350 at microcenter (if one is by you) or online, 4 more gigs of ram(make sure it's the same frequency if it isn't 1600, get some ddr3-1600 as it is fast and cheaper), a nice cpu cooler for overclocking(preferably water cooling H80i or H100), and a 650 ti or 660 (light boost, 3d, physx, cuda, etc.)
#10 suggested a 750W psu which is just wasting money. The 500w you have should be fine if you don't plan on getting the 7870 + decide to crossfire later on. If you really want a new PSU get one from corsair that is 600W or 650W the extra 100W would be unused and unnecessary.
I got 750W because I got an AMD CPU AND GPU. AMD products are usually power hungry, and if he ever wants to crossfire/overclock, he can do so. Also, with 750W, he can upgrade to a 7970 if he wanted to or possibly get a new AM3+ CPU that AMD might never make.
EDIT: The 650W of the PSU I recommended is actually the same price on newegg, so yeah.