Photoshop...
PROCESSOR: you'll do fine with either a P4 or Athlon64.
benchmarks
don't go dual. there is *some* benefit, but not anything proportionate to the price increase.
RAM: As other people have stated, Photoshop will not access more than 2GB. As a general guideline, PS uses 3-5X the filesize in RAM. So, based on what size files he's using, buy the appropriate amount of RAM.
edit: more than 2GB isn't necessarily a waste -- it would ensure photoshop gets a full 2GB.
HD: Well, number of HD's matters. Again repeating what some people have said... Photoshop has what's called a scratchdisk. It uses that when it fills up the available RAM. It should *NOT* be on the same physical drive as the windows swap file. (It's also good to avoid putting your Photoshop data files on the same physical disk as the scratch disk aswell.) A three drive setup seems to work best. The following is a good setup:
disk0 - OS, Programs
disk1a - 5gb (give or take) partition for primary scratch disk (seperate partition keeps it from getting fragmented)
disk1b - the rest for non-photoshop data files, secondary scratch disk (incase photoshop needs more than 5gb -- unlikely)
disk2a - 4gb partition for windows swap file
disk2b - the rest for photoshop data
To be clear, disk0, disk1 and disk2 are three seperate physical drives on their own IDE channel (don't put two drives on the same ribbon). Use an add-on card (cheap) if your motherboard doesn't have 3 independent IDE channels. SCSI is better, but way more expensive.
VIDEO: High-end (3d) is not needed. Again like a lot of people said, Matrox is a good choice. Followed by ATI. Dual-head with photoshop is great. DO NOT GET AN LCD FOR PHOTOGRAPHIC WORK. I don't think I can be more clear.
ANYTHING ELSE: Well, be careful if people suggest a RAID0 setup (striping). The only time I would recommend that is if the RAID0 is strickly for your Photshop data files and nothing else. In that case, you'll notice big improvments when opening and saving 100+ megabyte files. BUT, if you use the stripe set for other things, a lot of the performance benefits will be lost. Also, you will lose everything on your RAID0 setup if only 1 of the disks goes.