I'd say the 20D would be a good starter but it entirelly depends on how much she will use it etc.
With the 350D coming in at £465[ish] with an 18-55 kit lens, or the 400D at £510 with the same lense it may be a little too much for her.
Dixons are even offering a 350D, 18-55mm & 90-300mm lense bundle for £559 which could be reduced with various discount code/Egg card deals.
I would just be worried about her spending her £'s on a camera she might never really use to it's potential. You would see a quality jump from the 350D to the 20D but not 'that' great.
Hard to say how I'd play it to be honest as I don't know your friend and I wouldn't think to say she would not use it or be happy with it.
Maybe take her round some local retaillers to see how she likes the feel of it etc [would have to be the 30D as the 20D is discontinued].
Oh and I took a quick look on eBay and found the following, not sure on the seller etc just to give you an idea. Has alot of kit for the £'s
http://cgi.ebay.co.uk/Canon-EOS-20D-...QQcmdZViewItem
LOL I'll leave the above in to show how easy it is to get caught out but having viewed their status and location inconsitsancies I'd avoid it. Better seller would be:
http://cgi.ebay.co.uk/Canon-EOS-20D-...QQcmdZViewItem
Ok last edit I promise
Someone is selling a 400D kit in the non-av classifieds:
http://www.avforums.com/forums/showt...=419751&page=2