Check out Tech Bargains dot com for Dell deals with coupons.
Dell Vostro 220 slim (mid-tower, too, but more expensive) often show up at very good prices. If they don't need monitor, you can just sell it off to reduce their cost basis.
According to Fat Wallet, instant discounts are stackable with Bing, but any coupon codes you have to enter manually may not.
If they can wait, I think really good deals at Dell show up near the end of their financial quarter, when they may be trying to reduce inventory to make their sales and profits look really good for shareholders.
Would also get Vista Home Premium at a minimum, so they get Windows 7 upgrade for free.
And I also agree don't get them an Atom based computer, particularly if you are going to use Windows 7.