Many of the HP Business Class systems for sale as refurbs come with Windows 7, might be able to play some of the games they want to play with a video card upgrade for $40, and come with a 1 year warranty. They are generally $89 and up depending on what CPU/Model it is. I even saw some Windows 7 refurbs for sale for $68, but I would avoid the really cheap ones because they only have a Pentium 4 processor and you will want a Dual-Core Core 2 Duo or better CPU and avoid Pentium D which was between the Pentium 4 and Core 2 Duo in age. The Core 2 Duo is newer, performs better than Pentium D if Core 2 Duo around 2.4Ghz or faster, and is more energy efficient. For a matter of like a $10-$20 price difference on the refurbs I would get the Core 2 Duo or better than a Pentium D. Since after all you want them to be able to do what they want on ( their ) system without saying this computer stinks and wanting to hop onto yours.
In my home my wife and daughter are both using Core 2 Duo CPU systems. My daughter has a Dell Inspiron Tower that has a Intel Core 2 Duo E4500 2.2Ghz with a $40 video card and she is able to do homework and play video games like minecraft, world of warcraft, and spore. My wifes system Iis a HP Pavilion that I got for free which came with a 1.8 Ghz Core 2 Duo, BUT the 1.8Ghz Core 2 Duo was horrible for gaming and so I had a Core 2 Duo E6600 2.4Ghz with 4MB Cache and installed that and that made a world of difference in performance. Her computer has a $65 video card in it for better performance than that of my daughters system and plays all games she likes to play fine.
* Only problem with Core 2 Duo would be if they want to play some heavy system spec requirement modern gaming. If this is the case then you will want probably either a Quad-Core Intel Core 2 Quad or a AMD Athlon II x4 2.6Ghz or faster CPU + invest in a $120 video card.
When you look at the pricing on refurb quad-core systems yours starting to get into a price range in which you start to think that maybe buying a completely new computer for them makes sense as for around $350-$400 your getting into modern entry level gaming builds, and most of the refurb quad-cores out there are above $200 unless you find a deal on ebay that isnt a piece of junk for cheap.