you might want to add a blu-ray reader instead of the dvd burner. That way he can grab a blu-ray from redbox of blockbuster kiosk.
If saving as much as possible is needed, then look at the ASRock E350M1. It's a little cheaper and ASRock good. It's an ASUS company.... so it's not Foxconn or ECS quality.
If he's going to encode/decode, I think Zacate will struggle with that. From the benchmarks I've seen, it can do it, but it'll take a long time. For encoding then possibly an 880G with AMD Phenom X4 840 would be good. Yesterday, I priced a Gigabyte Miro-ATX 880G board and AMD CPU bundle at newegg for $190 with free ship. You can also wait and see what the next generation of AMD is going to produce and see how the latest steppings of Intel's motherboards are going to turn out. Especially see what's in the Mini-ITX format.