come november 5th (i belive it may be setback to november 16th) ati and nvidia will haave some new video cards out. you may want to get one of those instead.
the next am2/am2+ boards are comming out november 20th i belive (somewhere around there).
here is a review of the 50$ power supplies, it may help you decide a good power supply.
http://enthusiast.hardocp.com/article.html?art=MTM5NywxLCxoZW50aHVzaWFzdA==if your friend is anything of a novice or wants a reliable nag free system i would recomend against vista (also check vista compaitiblity with the motherboard manufacture. asus.com.tw should be the site if im not mistaken (i could be).
as for a thermal solution, no need for watercooling these days. the only things needing watercooling would be hot intel chips and grfx cards.
i would guess most cpu coolers would work fine.
www.overclockers.com has the best resource for cpu coolers!
i think it was the scythe ninja that did really well?
http://www.overclockers.com/articles1263/here is a list of those articles
http://www.overclockers.com/topiclist/index15.asp#HEATSINK%20REVIEWS%20AND%20TIPS