A co-worker is making her first leap into the computer age, and buying her first PC.
Being the friendly guy I am, I offered to put together a CD of (free) essential utilities she’ll need for day-today use. Here’s what I’ve got so far:
-AdAware
-Zone Alarm
-Acrobat Reader
-Win Zip
-Clean Up!
-Music Match
-Quicktime Player
-Eudora
-Open Office
Am I missing anything?
Spybot S&D
TurboNote
TweakUI
RegClean
Trillian
FTP Explorer
MRU Blaster
PopupPopper
Opera 7.20
Irfanview (excellent freeware image manipulation)
HDCopy (good tool for migrating your OS to a larger drive - used to be freeware, but I think that has changed)
GIMP
Mozilla/Firebird
Quake 1.32 patch 
Freecell.
Am I the only one who saw the OP and thought:
Water
Electricity
Gas
???
Oh, not that kind of utility. I see. Well, this may not be exactly what you’re thinking about, but the new Google search bar is pretty cool. (It suppresses pop-ups.)
irfanview
HistoryKil
Winzip
Nope. I was ready to pop in and say that I figured electricity was pretty essential, along with water. Gas, depending on where you are. Beyond that, I figured everything else was non-essential (though nice).
Proxomitron (for popups and more)
BSplayer (if you want a alternative to Windows Media Player)
Winamp (IMHO better then musicmatch)
WinRAR (for the compressed files that Winzip doesn’t cover)
Here’s a old thread I started about free stuff on the net. It might give you some more ideas.
Ones not mentioned so far and as far as I know are still free:
Window Washer 5
Webwasher
Spysweeper
Star Downloader
Just changed computers and haven’t gotten around to moving everything to this one yet…old one had about 50 others you’d find useful
Sorry to go a little offtopic:
IMHO, you shouldn’t overhelm her with a bunch of utilities right from the beginning. Just give her the very bare essentials and then teach her how to discover new utilities when and if she needs them, from sites like Download.com or Tucows.com. I think that giving her too much at once might just make her boggle at the huge list of strange names and not use any of it… besides, knowing how to find stuff, including software, on the Internet by herself would be a very useful skill for any computer user to have.
All of this is, of course, assuming that she’s NOT the kind of person who LOVES to try out every new piece of software… if she’s excited by that kind of stuff, then, by all means, make her a huge collection of tools 
And if that’s the case, I’d suggest a multi-archive tool like UltimateZip or PowerArchiver in place of WinZip/WinRAR/WinACE/Winwhatever. Something that can open all major archive formats seamlessly, so that she won’t have to deal with the hassle of using different archival tools.
Just my 2c.
Download Accelerator
Very useful for downloading your stuff.Makes it a tad faster and also gives you resume options.Most of the features are present in the free version.
The wonderful icon.
Sorry, I had only seconds before this blasted internet filter kicked in. The wonderful icon.
I cannot live without this program. No, it’s not as critical as a virus scanner or firewall. And it’s not as important as your mail program or office suite. But the capabilities of additional keyboard shortcuts and specialized window manipulation features make it invaluable to me. And it’s teeny and free!!! Highly recommended.
Yahoo toolbar for by bookmarks. And a lot of people are starting to use the google toolbar for its popup stopping ability.
Also, watch out for spyware. Isn’t Download Accelerator (DAP?) spyware? Or did the developers of that program see the light? Someone recommended Spyware Search and Destroy. That’s your spyware protection of choice. I can’t tell you how many lame websites out there try to spy on you. CNN! I’m talking about YOU! Spyware S&D prevents it all from ever getting installed in the first place.