I've set up a number of PCs for family members of the years. I'll talk about the XP/Vista/2000 side of the house, I've done Linux before but about 100 people already posted ahead of me :)
Some hints:
1. Install the OS on one drive, or partition and then the very first thing you want to do is point the users's profile (My Documents, etc.) at another partition or drive. We'll get to that later.
2. The "blob" theory. I've learned in over a decade of working support that the average users has blobs. They have an "e-mail blob" a "web blob", a "get my iPod synched" blob. They don't care what the blob is called, they just know it does some mystical thing that lets them get to want they want. So make sure those blobs are in an easy to find place :)
3. Replace IE with Firefox/Opera/Chrome/Your choice. 99% malware is dealt with this way. Install AdBlock Plus or equivelent. replace Firefox's icon with the IE icon if your user is particularly stupid. Remove all shortcuts to IE.
4. Set up automatic updates for the Windows crap and the anti-virus. Set it to go off at some point when you know they'll be using it. Most people turn their PCs off so having automatic updates happen in the middle of the night is a waste of time. Spend several patient minutes teaching them to pay attention to that little yellow shield and obey it when it appears. :)
5. Install TightVNC, or DameWare, or subscribe to Webex, or some other way that you can remotely control it with. Install a blob on the desktop that'll tell them their IP. Punch a hole in the firewall to allow access. Webex has saved my parent's PC (they live 4,000 miles away) on dozens of occasions.
6. Don't let them install ANYTHING without contacting you first. Preferably have them call you and let you do it. It's amazing how much crap users put on their PCs on a whim.
7. Now you done that, Ghost the system partition. They're going to have it broken in a month or two and you're going to want to quickly reinstall it. That's why we put their profile on a separate drive or partition.