If it was me, I'd charge using Paypal. PhpAdsNew should work fine. I've never personally used it, but I have heard it's decent. Your price all depends on how many impressions he gets and how much traffic your site gets.
One site that I know of, for a banner in the top right hand corner of the website charges $350 for 100,000 impressions.
I wouldn't suggest per impression, you just have to keep up with silly stuff. All of the big forums I know of charge a set rate by the month and most of those are for banners just in rotation. Give them your stats and your price and let them decide if they want it.