If you go to Settings–>General–>About, which software version does it say?
Well, after being on hold for about 45 minutes, finally got someone from Apple’s help desk to walk me through the procedure and lo-and-behold, I’m finally done! New IOS (8.1) set up, Skype working again (it wasn’t because of the old OS) and even set up her iCloud account (she didn’t have one earlier) and loaded all her pictures on it.
Thanks again to everyone for helping me out.