My 2c:
I would be skeptical about buying a V8z and then upgrading it. Unless you know who and where it came from, I never trust anyone elses work. That's just the way I am. Not saying that everything I do is the best, but at least I know how it was done.
If it was my $20Grand, I would find the absolute nicest Z I could, regardless of the drivetrain. Then drop in the motor and trans of your choosing. That way all you will to concentrate on is the drivetrain, and not bodywork, rust, interior etc.
For arguments sake:
Also, I guess the big question is....will he be doing the work himself, or having a shop do it? If a shop does it, then it will cost significantly more.
car: $8000.00 (for a near perfect car)
Crate motor (~350-400hp): $5000
Trans (auto): $1000
Driveshaft, mount kit radiator and other ancillary crap: $1500.00
New wheels and tires: $1000.00
Now you have a pretty, solid, very fast car for <$17k and have $$ left over for other stuff like stereo, nice steering wheel, or whatever else...
Tim