XP is much more light weight and less resource demanding than win7, not to mention much more stable for server use. It uses less RAM and less CPU and for what he needs to do it is the best windows to use, it enables him to build a much cheaper machine without using an OS that requires more resources, thus cutting cost on RAM and CPU/motherboard. Why would the bare minimum be win7 for a network connection? XP works just fine for that. This isn't a gaming rig or even a media center, all he wants is music playback.
Maybe short term. Windows XP Ram allocation is atrocious. XP after about 6 months use is so bogged down its useless due to logic in code and thats a proven fact. Have you ever tried to use an XP install thats more than a few months old? Its extremely slow. As a network engineer no way I would use XP on a media machine. XP is a huge security threat starting April 1st. If its going to have an internet connection I wouldnt touch it. RAM is also cheap. You can get 8Gbs (2x4Gb sticks) for $70 for top of the line RAM. Which would be over kill. 4Gbs of RAM at $40 on a Wi7 x64 bit OS would be plenty for music play back and would prevent the inherent security risks associated with XP.
Also 64 bit computing is the future. XP limits the PC to 4Gbs of RAM as well including any GPU RAM. If he has a 4Gb stick and a 512Mb GPU the system will only see and use 4Gbs of RAM. If he ever wants to upgrade to 8 or 32Gbs of RAM in the future he is going to have to shell out cash for Win7 64 bit OS and RAM instead of just RAM.