I’ve worked in tech support for eight years, I’ve picked up a few tricks to dealing with the very computer illiterate.
One of the most important things to do is neutralize their fear of breaking the computer. If they ever express any kind of concern about performing an action, either at your direction or (most likely) something you ask them to do themselves later, I explain to them that there is no way they are going to break or ruin their computer just by typing on the keyboard and/or clicking things. I let them know their data can be lost (and I have learned with a large percentage of the population you HAVE to let them know that this means their emails, pictures, documents, etc. because for a lot of people ‘data’ just means some esoteric computer stuff they don’t care to understand) but their computer will not be ‘broken’, and it should be easily fixed (easily, that is, compared to some hardware problems).
You have to be ready to accept incorrect usages of computer terminology. I noticed in one of your posts you dismissed a guy requesting you to ‘reprogram’ the computer. This was flat out dumb, you had to know he was not expecting you to do any actual coding. He may have heard of some way to reconfigure XP to run faster, saw some webpage of how to make XP look like MacOS, or maybe just wanted different colors or a different theme. On something like that, I’ll just ask them what they want me to do and not bother correcting their usage. I don’t care if they refer to the actual tower as the CPU or the hard drive (I’ll usually correct them if they call it the modem, because that can cause some serious confusion on a lot of issues). The only things I’ll bother trying to teach people the right word for is things that can cause confusion in our troubleshooting - if they say ‘reboot’ when they mean ‘ran the CD that reformatted the HDD and reinstalled the OS’ I make sure we get that straightened out, because I am likely to ask the customer to reboot the computer at some point or another. If I am trying to troubleshoot specific components of the computer I’ll make sure then that when I ask if the computer had any little lights lit up on it they are not looking at the monitor.
One thing you might try doing that I do all the time by the nature of my job (I only do phone support) is not actually sitting at the computer and doing things for her, but walking her through them. It would a lot easier for you, since you could point at the things on the screen you want her to click, as opposed to having to describe them. She’d probably learn to do stuff on her own better if you consistently did this, and when she sees how simple your job is she may be less likely to pay you $100 for things she might be able to figure out herself. A lot of people think that folks who know how to use computers are essentially practicing magic - typing strange codes that make no sense, figuring out complex equations, performing series of actions in complex and esoteric rituals. If you can help them understand just a few of the basics, once they get to a certain point that light bulb goes off and they understand computers just like they understand cooking, auto mechanics, or bridge.
Use analogies a lot when explaining how the computer works. You can tell them they are running out of memory due to background applications all day long and you’ll get nothing but a blank stare. I’ve found using the analogy of RAM being like the surface of a desk you are working at, and storage (hard drive, CDs, etc.) as the desk drawers you keep all your files in, as very useful. I explain the reasons why various forms of computer maintenance are a good idea, what will happen when they don’t do it, and of course make the analogy to changing your oil and/or putting gas in your car. When people don’t understand how a problem they are describing cannot possibly be related to what they think is causing it, I’ve used the analogy of ‘There’s no way your car could fail to start because of a flat tire’. You don’t really have to dumb things down as computers are actually pretty simple, you just have to break it down and explain it in terms they understand.