that they already have a Monitor, Keyboard, Mouse, Printer and maybe other peripherals.
There are 2 possibilities here.
1. As they already have a Monitor, Keyboard and Mouse, you could probably save them about £120 by not replacing those items.
2. If they have had the Printer and other peripherals, for several years, they may not be compatible with "Windows 7" and will need to be replaced as well. Even things normal like Digital Cameras can fall foul of this problem.
Another solution would be to Give the old PC a spring clean (CCleaner, Defrag, etc), and them give it more RAM, replace the "On-board" Graphics with a Card, and possibly, buy them a really Top of the Range Monitor (say 22" or even a 24" one).
After all, if they are running XP, it is good until late in 2014 with SP3.
Possibly not as exciting as a "New" PC but I've just bought a Samsung P2450 and hidden my old XP, Beige Box, well out of sight and it's almost as good as a new one.