People are too obsessed with "upgrade, upgrade, upgrade" and that anything old is inherently bad and therefore worthless.
If his old Mac with OS 8 is allowing him to be productive then what the hell is wrong?
As far as OS X goes, however - no one should be using anything less than 10.4. If your Mac can run 10.2 or 10.3, it can also run 10.4.
Then it stands, the only reason you should be using 10.4 and not 10.5 is because you have a G3 processor. Even 450 MHz G4s can run Leopard just fine.
You should also have a minimum of 512 MB of RAM. Anything less will be severely degraded.
If you have an old Blue & White G3 then I can sell you a G4 processor for cheap. You can drop it in and now OS X will run faster and you can upgrade to Leopard. Fill the RAM slots up and get a faster hard drive. You will have a very usable machine.