The hardware needs to be manufactured to run DirectX10, you can't just update the firmware or software. That's why there's such a big hype around the 8800GTS/X cards. They're the only cards out right now that will run DirectX 10 applications.
Quad core really doesn't have any advantages right now unless you want to do some intense multitasking. You will see no real pperformace gain while gaming (in comparison to a dual core of a similar clock speed), and for games that aren't multithreaded (most out right now) you will probably have a performance loss.
Yes, it might be a nice power supply, but almost $300 for one? That's crazy! You can get a great one that will run that setup for around $100. Even if he upgrades to a DirectX 10 graphics card, he won't need more than 600 watts.