Yes, but when 25% is a matter of a couple of hundred dollars rather than several thousand dollars, not having to deal with the hassle of buying used might be worth it. Especially if the buyer isn't familiar enough with the camera to run the proper tests to make sure it works, or is just simply overwhelmed with the idea. Although, I would say it's worth considering buying used/refurbished from a reputable store. That way there's really no worry about being scammed, and there's less effort involved :).
If the buyer is serious about learning photography, then it might be best to find a refurb D40 (saw plenty on B&H, Adorama, etc. a month or two ago, might be harder to find now) for under $400 with the kit lens. Then let him figure out what kind of lens/flash he needs in the future. Getting a 55-200 with it would be fine, but if he figures out that he shoots in low light all the time and doesn't use the telephoto end of the kit lens, then he would have thrown away money that should have bought him the 35mm f/1.8. For this reason, I would always advise waiting before buying a second lens. I know my style of photography changed considerably when I started shooting a DSLR, and buying a second lens right away would have been a waste of money.
I guess it depends on how quickly he thinks he will branch out from auto-mode single lens style shooting. If he feels he can sit on the kit lens for a while, then saving part of the budget to get a second lens isn't necessary, obviously. Make sure he realizes that if he gets serious about it that he will be itching for a new lens very quickly, though.
EDIT @ Soap, People get very daunted by DSLRs when moving up from a point and shoot in my experience. No need to overwhelm them right away. They can always get an SB-400 later when they're more confident.