For someone going to college, a laptop is much better than a desktop. I don't know what you're looking to spend, but I spent ~$1500 on my HP Pavilion laptop, and I've been pretty happy with it (I'm a software engineer and use my laptop for work, so my needs are probably a little bit tougher than hers would be). If you do get a laptop for her, make sure it's got built-in wireless networking. I think most of them do these days, but she doesn't want to be messing with a wireless card if she can help it.
Here's the specs I'd probably be looking for if I were in your shoes, buying a laptop for someone going to college:
Hard drive - 40GB should be more than enough, 60-80GB wouldn't be too bad if it doesn't cost too much extra. (My work laptop has 60GB)
RAM - I'd get 512MB. It may be overkill for what she's doing now, but if and when Microsoft ever releases a new version of Windows (supposedly next year), she'll be glad it has that much. Trust me.

(I've got 1GB of RAM myself, but a college student doesn't need that much)
DVD burner - would depend on the cost - sometimes companies will throw this in as part of a bundle. I'd definitely get at least a CD burner - you want her to be able to back stuff up.
Wireless - definitely
CPU - unless she's a hard-core gamer (and you aren't buying a computer for her to play games, right?), I think just about any Pentium 4 or AMD processor they're selling today will be more than enough.