If he is using a 500MHz processor now, its probably a P3 not a Socket A platform.
Having a GF 256 and then a GF2 GTS and then a GF2 Ultra, I really can't say there is much of a noticable difference other than bragging rights in benchmark discussions. I really don't think it is worth blowing all that coin on a GF2U when you could wait a little bit and get a GF3 for close to the same price.
And a TNT2 isn't exactly bad. So I would have to say, go for the 1GHz processor. This will give you the most performance gain over all, not just game play.
And here is another thought. The cheapest GF2U is about $330 on pricewatch (or at least what I found this morning, I could be wrong). The cheapest P3 is about $230 and a GF2 MX is about $100. You could get the P3 and the GF2MX for about the same price as the GF2U by itself. This way, you could have an overall speed increase and a video card that can play every game out there with no problems what so ever.