If somebody told me that they just wanted a PC for internet use (and for low-resource applications such as word-processing), I'd be able to get them something suitable for under �100. In fact, I've done it on several occasions.
How? Well, there's a wonderful company called AC Computer Warehouse with really cheap prices on refurbished systems and base units. I can recommend their efficiency and helpfulness (together with the quality of their products) without reservation. Their only weakness is that their website doesn't always show everything they've got!
For a starter, though, see here:
http://www.accomputerwarehouse.com/products.as p?cat1=New+and+Factory+Refurb+PCs&cat2=PC+ Base+Units
That link will show you a selection of base units, from �35 to �85, which all come with Windows pre-loaded. Add on another �9 for a keyboard and mouse and you're almost there. All you then need is a monitor and (although the cheap ones aren't shown on that page), these start from �10.
If you're interested in the bargains from that firm, I suggest a visit to the newsagents. AC Computer Warehouse advertise every week in Micro Mart (�1.99) and their ads always have plenty of offers which never seem to make it to their website.
Chris