For one, that CPU will not work because of the 800 FSB. If you look at the specs on the MB it tells you it only supports Pentium 4 HT, Pentium D, and Celeron D with a 400/533 FSB option. As for the RAM, it should be fine. The mobo supports up to 2GB DDR-400. If you're looking for cheap, go with AMD. They are just as good for this type of situation anyway. You could get a dual-core A64 3800+ @ 2GHz
Here's my recommended setup:
(get 2 for 1GB)
AMD Athlon 64 X2 3800+ @ 2GHz
As for the OS, stick with XP, it's really all she would need. This M/B is Vista certified however.
Your grand total: $135.95
I am not 100% positive about the RAM, NewEgg's Specs are not particularly detailed as it does not tell me what memory is supported, it only says memory standard. Go to Crucial and look up that motherboard to confirm.