Well, I have an nLite XP SP2 installed on my 4GB mini that I got from the outlet. The OS is taking about 3 GB of the drive. With OpenOffice installed, I have about 500-600 MB of free space.
But it still runs great, especially, after I replaced the stock 512MB memory with a Kingston 2GB memory.
More than enough if your wife would be just surfing the web. An SD or SDHC may be useful for music listening.
But I try to save the space on my SDHC by using online radio stations through WinAmp.
I am thinking of upgrading my SDD only because I need (or want 8-) ) more than surfing web and listening to music.