Hello.
The monitor resolution is a little too much for that gpu (mostly cause of its low VRAM).
Here is my suggestion:
Case: NZXT GAMMA Classic Series $39.99 Best sub-$50 case
http://www.newegg.com/Product/Product.aspx?Item=N82E16811146061
Mobo: ASRock H61ICAFE LGA 1155 Intel H61 $64.99 4RAM slots, ATX
http://www.newegg.com/Product/Product.aspx?Item=N82E16813157246
CPU: Intel Celeron G530 Sandy Bridge 2.4GHz $51.99 Sandybridge for gaming
http://www.newegg.com/Product/Product.aspx?Item=N82E16819116409
RAM: Pareema 4GB (2 x 2GB) 240-Pin DDR3 SDRAM DDR3 1333 $19.99 No need for 8GB RAM. your rest system will bottleneck this PC long before its RAM
http://www.newegg.com/Product/Product.aspx?Item=N82E16820576003
HDD: Western Digital Caviar Blue WD5000AAKX 500GB 7200 RPM $84.99 My 320GB version is becoming 7 years old this year without any problems...
http://www.newegg.com/Product/Product.aspx?Item=N82E16822136769
GPU: SPARKLE X450S1024KDL GeForce GTS 450 (Fermi) 1GB 128-bit GDDR5 $109.99 far better for 1080p
http://www.newegg.com/Product/Product.aspx?Item=N82E16814187174
PSU: Antec VP-450 450W $39.99 About the psu. This is better choice. There is no need for 700watt from a non good brand.
http://www.newegg.com/Product/Product.aspx?Item=N82E16817371045
Optical: SAMSUNG 22X DVD Burner $16.99 No point changing that
😛
http://www.newegg.com/Product/Product.aspx?Item=N82E16827151244
Total: $428.92 without rebates.
You might want to change a few things so you can go down with the price a bit (like buying a cheaper mobo), but really lower than this can make the system not so good (the $20 more for mobo gives your friend the opportunity of good upgrade in the future, you can add yours and you can stay at $400). 1080p gaming is a little demanding and a 512MB card will have problems for sure. (lots of stuttering, low performance, etc etc). Also as you can see from my comments 8GB RAM isn't something gaming needs (at the moment) for 1080p. 4GB is enough and in all scenarios, the rest system will bottleneck the game long before the RAM will do.