Operating System : Win 7 needs to be included in price
Additional Comments: Dont need anything special for a case just Mid Size with good ventalation. Access for usb and SD card on front. Possibly will be used for VHS to DVD conversion but not required in the $400 budget.
That build looks OK except for the motherboard. I wouldn't call ECS dependable really. I'm sure they're OK but a Gigabyte board would probably be better. Intel make some good boards too, not exactly feature rich but they tend to be rock solid in terms of reliability.
I'd probably stick with Intel for the low power consumption and decent integrated graphics (compared to AM3/AM3+).
EDIT: You don't need to worry about performance at all in this build, any modern CPU with 4GB of RAM and a 7200RPM hard drive will be fine. Just spend the extra on getting good reliable brands in my opinion. I put a similar build together for my mum and I used a dual core celeron with 4GB RAM and a small SSD (she doesn't need storage. That build has been more than fine for her.
The Fractal Design Core 1000 would be a good case for this. Nice cheap little tower that fits all standard PC parts. It's surprisingly small.
I dont believe I will have to worry about my 55 year old mother-in-law playing any game but solitaire. If I remove the OS from the $400 bugdet will there be a big jump in preformance. If so please provide build for $400 not including OS.
CPU: Intel Core i3-2100 3.1GHz Dual-Core Processor ($109.99 @ NCIX US)
Motherboard: ECS B75H2-M3(1.0) Micro ATX LGA1155 Motherboard ($50.98 @ Newegg)
Memory: Patriot Viper 3 8GB (2 x 4GB) DDR3-1600 Memory ($25.99 @ Newegg)
Storage: Seagate Barracuda 500GB 3.5" 7200RPM Internal Hard Drive ($54.99 @ NCIX US)
Case: Rosewill FBM-02 MicroATX Mini Tower Case ($28.99 @ Newegg)
Power Supply: Corsair Builder 430W 80 PLUS Certified ATX12V Power Supply ($34.99 @ Newegg)
(Prices include shipping, taxes, and discounts when available.)
I didn't include an optical drive in these lists, mainly because optical drives are pretty cheap. There's not much point in getting a new one, as there isn't much of a difference. You could find an old one on eBay for maybe 5 bucks, or new for $15.
I think priority number one is reliability though. That's where the Seasonic PSU, Crucial M4 SSD and ASRock motherboard should shine. I've heard of plenty of issues with ECS motherboards.
EDIT: The case is personal preference really. I think they're quite important for people that don't appreciate/understand performance as it makes it feel a bit more special. Fair enough if you would prefer to save a bit of cash on it though.