I also agree that Hitachi is awful. I'm more of a fan of WD. If he's not going to be making videos/downloading them, or huge files, then why spring for the bigger hard drive? He could always go out and buy an external one a bit cheaper anyways if he needed it

, I've done it.
I don't really know about the overclocking idea, because it looks to me (I could have read it wrong) that you only have a single core processor. There isn't a WHOLE lot you can do to make it go much faster. Most overclocking is done on quad core, and if you have enough money 8 or 12 core. I've seen some cheap people go on dual though lol, worked alright for what its worth.
Lastly, if you plan to give the old hard drive, make sure its completely wiped. I mean, yes, trust your friend... but personal info is personal. Keep it that way.