i wouldnt recommend going to a Linux distro to a relative beginner.... i know its gotten easier over the years, but still. if you move up to a Win7, remmber to go to Acer's website to get all your drivers installed.
as far as keeping your AV up to date and free, theres alot of options. i use Avira or Microsoft Security Essentials, both free and update often (Avira on my laptop MSE on desktop). also Spybot Search and Destroy with Teatimer watches stuff from being written to the registry, and SpywareBlaster runs in the background and shores up some holes in your browser. Malwarebytes Antimalware is great when something does make it thru your defenses. all these are free, and should be the first things installed on a fresh windows install. i suggest downloading them before formatting and throwing them on a cd or better yet a USB Key, and install them before even connecting to the internet. just in case.
but yeah a windows 7 disk will format the drive for you, just follow the prompts and it will wipe the drive and install clean. thats your best bet, as i dunno if its the same now, but back in the day it only changed files that needed to be changed, and so old problems could still be there if there was a problem with the old install.... so back up what ya need and do a full wipe is generally best.
I disagree. I've provided ubuntu and mint computers to many beginners. Older people and very young kids both. A lot of times older folks who don't care about gaming and just want to surf the web don't notice the difference. It's probably easier the less microsoft crap you have in your head.
It's also easier to install than windoz, in fact, he doesn't have to install it at all. If burning a cd is too hard you can get one from ebay for $1 and test drive the system running from the cd before you decide to install. And he won't need all that security stuff you listed. I haven't had antivirus software in 4+ years. Never had a problem and I download some "interesting" stuff.
The only shortcoming it has from my perspective is a lack of quality educational children's software.