If he spends that $400 (actually, $499 or so) on a Mac Mini, he can probably go for a good long time. There are no known viruses on OS/X.
I don't know if anything bad can happen from using IE on the Mac; I don't believe so. Safari is not perfect, but it works just fine for almost all of my browsing. One thing I like in Safari: there is a pull-down option in Safari for resetting *everything*: cache, cookies, etc. I do this periodically -- I like to flush all my cookies periodically just as a regular practice.
The only real software people will need in general is Office 2004. For most, the student edition should work just fine for their home needs. If there is not a lot of need for compatibility, the $80 iWork package (Presentation software + Apple word processor) should work just fine. The main thing lacking in iWork is a spreadsheet; Apple should address that in the next release.
With the dropping cost of hardware, more and more people should clearly look at this option. As an aside, I've been surprised that Apple hasn't been more aggressive in getting the Mac Mini into Kinkos stores so people can "test drive" them there. The current Apple machines in Kinkos stores are crappy old G3 machines. According to the local Kinkos shop, Dell has been very aggressive getting their machines in Kinkos stores. Apple: are you listening?
--phil