Most of the relatives who ask me about PCs have very basic needs - word processing, email, web browsing - and minimal computer literacy. Since they are going to call me to handle anything that goes wrong anyway, I prefer to set up a system for them in a standardized manner, so that I can troubleshoot most problems over the phone and, if all else fails, easily recover from whatever they have managed to screw up.

My PCs of choice are IBM refurbs purchased directly from IBM. They are certified by IBM, have a 7-day no questions asked return policy (including return shipping), and a 3 month warranty.

http://www-304.ibm.com/shop/americas/webapp/wcs/stores/servlet/default/HelpDisplay?storeId=1&catalogId=-840&langId=-1&subject=2576394
 
These are usually systems that were leased to large corporations and are better made than most of what you can buy in electronics stores, which means that once I set one up, I don't have to worry about hardware problems. Also, because they were business systems, they come with a legal copy of XP Professional instead of Home, a recovery partition on the HD, and have good downloadable documentation and support from the IBM/Lenovo web site.

The refurbished IBM desktops are so cheap that it's almost like buying a legitimate copy of XP Pro with the hardware thrown in for free. The notebooks are not as much of a bargain.

Given today's huge drives -- and the huge amount of data that tends to fill them up (nature abhors a vacuum),  I don't think full drive imaging is a good solution. If it takes too long to image one's drive, it just won't get done often enough to provide proper protection.

My suggestion is to partition the drive into at least two logical drives. The C: drive should be relatively small (say, 30GB on a 500GB drive, 50GB on a 1TB drive) and should be used only for software installations (a pain to restore) and data that is critical and changes frequently, such as email, current work, etc.. Everything else should go on the D:, etc. drives.

The C: drive can then be easily imaged regularly. The D:, etc. drives don't need to be imaged, but rather should be mirrored or synced to one or more external drives, or a backup computer.

I have 4 logical drives on my primary work desktop system, with D:, E: and F: used for different types of data and storage. I create a full image of C: on another partition at least once a month and always before installing anything that might scramble something. At the end of each month, I image C:, copy the image file to a bootable DVD and store that in a fireproof safe in my basement.

On my working notebook (which has no built-in optical drive), I have two logical drives and regularly image C: to D:. I also keep a copy of the most recent image of C: on a bootable USB flash drive, from which I can restore the system to a working state in case of disaster on the road.

I use Acronis True Image Home (currently 2009) for my imaging and UltraISO to create my bootable DVDs. I never use incrementals (too fragile and slow to retrieve) but keep current work and critical data synchronized between a couple of systems (at the minimum, my desktop and notebook).