My advice is to think it completely through before spending the first dime. The hardest part is being honest with yourself. If he's dreaming about a carbon fiber Dura-Ace bike is an upgraded version of what he has going to satisfy him?

Once you start down the upgrade road it's hard to stop. Every dollar that you spend makes it harder to turn back. Ultimately, you'll end up with an old frame that hash some new parts and probably came closer to the cost of a new bike than you had anticipated. If that's what you want, fine. If somebody really wants a new styling bike, however, it's probably not going to cut it.