If she wants to start with the best, then I have to agree with 'The Exorcist' - Best. Horror film. Ever. Even now, after having seen it multiple times, it still gets to me.

However, since there are many sub-genres within the horror genre, it might be best to break it down even further.

Perhaps a good creature feature would do the trick. I'd go with John Carpenter's 'The Thing'. Disturbing!

For slasher movies, you can never go wrong with the original 'A Nightmare on Elm Street'. Kept me awake for 3 days straight.

For ghost movies, it's a toss up. One of my personal favorites is "The Changeling' starring George C. Scott. It's one of the spookiest films I've ever scene, and it does it with abolutely no blood or special effects.

For Japanese horror, I would suggest the original 'Dark Water' by Hideo Nakata. It builds up some terriffic suspense and has one of the most chilling and disturbing climaxes I've seen in quite some time. Avoid the American remake with Jennifer Connelly at all costs.

'The Ring' is a more acceptible American remake. It's somewhat better than the original Japanese movie and does a very good job of building an atmosphere of fear and dread. However, avoid the American sequel 'The Ring 2' at all costs.

The Japanese "Dark Water" is a good call.

I really liked "Stir Of Echoes" with Kevin Bacon but I know that sounds lame.
I really thought it was good and scary, though!

The original Grudge - "Ju-On" was very scary to me as well.

I'll try to think of more.