If he is only going to do basic video editing (Final Cut Pro,) stay with the stock GeForce. If he is going to do compositing and effects (Shake and Motion,) go for the Radeon, or, if you really want to go all-out, the Quadro. Why? Because, Final Cut Pro does *NOT* use video RAM, or the video chip. You will see ZERO difference in doing Final Cut Pro work between the GeForce 7300 GT and the Quadro 4500. If you are doing Motion work, though, it will be night-and-day.
Likewise, for the actual EDITING, the stock 2.66 GHz processors will do just fine. It's only in the final rendering that moving to the 3.0 GHz chips will make any noticeable difference. And if he is going to keep the movies in their native HD format the entire time, even that won't matter.
So what it all boils down to is hard drive space and RAM. RAM is good for video editing, especially HD video editing. But from what I've seen in my client's machines, you'll hit a wall at about 4 GB. Even then, you don't see much improvement from 2 GB to 4 GB. But, because of the ease of upgrading, adamyoshida's idea of adding an extra 2 GB has a lot of merit. It's not terribly expensive, and it will give you a decent performance boost over the stock 1 GB. As for hard drive space? Order it with the smallest hard drive (160 GB,) to hold the OS and applications, then get 750 GB drives aftermarket for the other three bays. (Or, if he can wait a couple months, wait for the 1 TB drives.) And, since I'm assuming this is for professional use, make sure to buy equal capacity of external drives for backup. And tell him to back up religiously.
So, my chosen configuration will cost you $2704 from Apple, US $532 from Crucial for the RAM, (good high quality memory, Apple certified for the Mac Pro, exchange rate as of 12/18/06 at 4AM for calculations below.) That brings you to $3319 before the hard drives. Seagate's 750GB drives can be had at $458 from Tiger Direct. Three of those will run $1374, to put you at $4693. Tiger Direct also has a Western Digital external FireWire 800 1 TB (two drives internally in a RAID,) for $635, which, when combined with his existing 500 GB external drive, gives you 1.5 TB of external backup for a total cost of $5328. Just a touch over the $5k mark. Of course, this also doesn't include the $1500 Final Cut Studio. If he doesn't already have it, remove the external drive, and one of the internal drives. This also doesn't include a monitor. Take out one more internal drive to buy a nice third-party 24-27" LCD.
If he doesn't have FCP or a monitor, this will only leave you with the 160 GB OS drive and a 750 GB data drive (plus the already-owned 500 GB backup drive,) but it should do until he can afford more hard drive space.
That's about all you can do for CAN $5000. The Radeon is overkill at that price point. (Save the $300 for hard drive space.)
