X-treme noob with poor eye-sight, need solutions!

I just recently got my grandmother a computer and while none of us are rich I am trying to find open source or cheap applications for XP to make it more accessible and user friendly with as little hassle as possible for mundane tasks like surfing the web and copying files from a digital camera to her old (but new for her) computer.
So:
Which is the best web browser for a person with poor eye-sight? I am very familiar with Firefox but not sure if Firefox has better add-ons than for example Opera or what add-ons to even look for if they exist.
Is there a simplistic replacement for the traditional menu and desktop style that pretty much all computers use, like for example the old manager for Mac OS “At Ease” which is probably ten years old now but something along those lines would be ideal. At Ease - Wikipedia, the free encyclopedia
If you plan on suggesting any screen reader please note that it should support Swedish as her English is not the best, not that shes clueless but still, utilities to make the computer experience less overwhelming and cluttered would be nice.
I do love the magnifying glass in Windows 7 which even I use to see fine print on my monitor from way over the room and I know vista’s can be adjusted to act the same but the one in XP is horrible.
I guess I could try installing win7 for her but Vista is out of the question, that would be like a brick.
I know pretty much nothing of Linux so if you’re going to suggest anything like that please, be gentle with the technical stuff, but windows I can hack around with pretty well.
Comp specs: 768megs of ram , 1.7GHz Athlon with a small HDD, too small for Vista without heavy Vlite modifications…
Right now it’s XP sp3 and even the 120DPI and smaller screen resolution doesn’t help her much, pretty bad eye-sight but she did see with like 300-400% magnifying resolution on a 15” monitor on a normal website with normal font size.

Please! Help an old lady out by helping me.

hi premier69 as you will know its is simple to set the desktop with large icons and text and this will remain throughout however you talk of IE/Firefox and a magnifying glass
well there is another simple free way of magnifying what appears on the screen within your internet browser
simply when visiting a web page if you hold down CTRL and use the scroll wheel on the mouse you simply zoom in on the whole page making all the text and pictures easier to read and see
If should your mouse not have a scroll wheel then you and also use CTRL with + and - located on both sets of numbers on the keyboard