Well if he wants more out of a receiver then of course he should get something else. $100 for my Onkyo is pretty damn cheap.
My HT-R640 is more powerful at 110w per channel compared to the TX-SR508 at 80w per channel. Also if you have a blu ray player that decodes Dolby True HD and DTS HD MA like a lot do nowadays then you don't need the decoding done on the receiver. The 508 does have more HDMI inputs but for less than $20 you could get an HDMI auto sensing switch like here http://www.amazon.com/HDMI-Switcher-...2171397&sr=8-4
which would then give you 4 inputs total. I was using a cheap one from Gamestop for my dvd player and XBOX 360 and it worked fine.
Now the 508 does have 7.1 compared to the 640 having 5.1, I myself don't care about 7.1 and is why when I got my new Yamaha receiver I went with 5.1 again.
Depends on what he wants to do and from what I can tell he isn't interested in some elaborate system.