Do you like playing GBA games? If so, don't buy the DSi unless they announce some awesome downloadable GBA games here soon.
Game Boy Micros go for $30 used at GameStop, so I wouldn't let that be a showstopper unless he REALLY wants an all in one device.
Anyways, is the DSi worth it? I think that depends on your situation and how much you like the DS, but given that your lite is falling apart I'd say yes. I like the D-Pad more on this, the buttons are clicky like the original DS and GBA SP and the screens are nicer. It's not a blatantly huge upgrade like the DS lite was in that regard, it's more subtle. It's appreciated though when going between the two, plus the weird rainbow coloration I noticed on the touch screen in the DS and DS lite (protective coating?) is absent on this.
However, if you don't have wireless the value here. One of the biggest features is the DSiware, and if you can't access that then the 40 extra would be harder to justify.