1. There will not be any issue with the file format- as long as she has apps that can read them. The OS X version of eudora should read her old mailboxes fine, or if she switches to outlook (or outlook express or entorage) she sould be able to import the mailboxes w/o a problem. The iMac comes w/ AppleWorks, which should read her Word 5.1 files, with perhaps a bit format lost. If she gets Word X, no problems at all.
2. If she gets a usb or FW zip, she can use her old disks. I have not had a lot of luck w/ USB SCSI converters- the FW may be better. But if the Zip is the only SCSI device she needs to hook up, it might be cheaper to go ahead and get a USB zip drive- you can find them for under $100 bucks. But if she can email the files to her new computer- or borrow a zip drive to move them- I wouldn't spend the money on a new Zip, unless she has a big investment in Zip Disks. CD-R's and CD-RW's are the wave of the future.
3. What version of outlook are they running- more to point, are the running MS Exchange for their email? If so- and they will not let her access her mailbox via POP or IMAP (which is possible if the exchange admin allows it) ahe will be stuck using outlook, which is Classic only. Ditto for Outlook express. The only OS X native mail app is Entorage X, which isn't cheap. Make sure she can't use a POP or IMAP client like Mail.app or Eudora w/ thier system.
What ever the case is, aside from possibly buying a new Zip Drive and MS Office, you will not need to spend money for this conversion.
Last thought- the 520 has ethernet built in- if she has an Apple transceiver, she can network the two computers and transfer the data that way. If this is a possibility- let me know and I answer any questions.