The OS choice (XP 32 or Vista 64) is down to spare licences and a tight budget. She uses her computer for basic apps/Internet usage, Flash games and old games (the most advanced one she's playing is Settlers - Rise of an Empire).
Spec-wise I think it'll be fine with either OS (parts are already on order):
Intel Pentium G620
4GB DDR3-1333 single-channel
ASUS P8H67-M PRO
Hardware we're re-using:
Seagate 500GB 7200.12
Samsung DVDRW
Cheap-and-cheerful 500W PSU that I intend to replace with an Antec HCG-400.
IMO:
XP advantages:
Faster to start up than Vista
She is currently using it (so she won't whinge about differences)
More free RAM for her to gobble up by leaving browsers open for way too long
XP disadvantages:
Not long until XP no longer gets security updates*
I'm sure a more modern OS would be better suited to newer hardware, maybe driver support too?
Vista advantages:
Faster app start times thanks to superfetch
Better new-app support (some apps don't support XP any more)
>4GB RAM support
Vista disadvantages:
Slow start-up and settle-down times**
It's a bit different to XP and she'll probably whinge a little, though she has used it full-time before and got used to it / liked it well enough
* - My wife grudgingly lets me on her computer to do maintenance. Ideally (IMO) I'd get her on to Win7 because IMO it's the best of both worlds, though these opportunities are few and far between.
** - I'm thinking that she'll probably use her computer like I do mine - put it to sleep generally speaking rather than a complete shut down, in order to get fast resume times, so I think Vista will perform pretty well under these circumstances, but I'm not 100% sure.