Joe,
Assuming that it is a Retail version, all you need to do is give him all
docs, PK, original CD, COA, etc. and remove it from your machine. It would
also be a good idea to give him a "bill of sale", just as written proof of
transfer of ownership. If he needs to Activate via phone and "prove"
transfer of ownership (although I've never heard of MS requiring this), a
Fax of the "bill of sale" would suffice.
If it was an OEM version, you can NOT transfer it to anyone or any other
machine. It must reside (or die) with the machine it was first installed on
.. . . that is one of the legal conditions of OEM software.