Fluids and bacicat2000, you are right on the money when it comes to "cheapies" on ebay etc hence the reason I'm not going to buy one of those chinese imported things. We were given one of those cheap trumpets to play with once and the quality was crap. One of our friends who is a flautist went to have a look at those $149 Aldi ones yesterday and said she played one and they were very "tinny" sounding. I'm thinking more along the lines of trying to get an old clunker that is a good quality, have a red hot go at repairing it if needed (can't be all that difficult can it?) and end up with something that has a nice sound. Sets of new pads are relatively cheap, shims are easy to make or aquire (just ask any Landy owner) and from what they say, patience and a keen eye is the main tool required.
The school will rent one but they sadly just use cheap student flutes like the $149 Aldi ones, the cost is somewhere in the vicinity of $75 a year to cover mainly the insurance and there is no purchase option through the school. Plus, after a year you have to buy and can no longer rent one. So my way of thinking is to fix an old one up for her, she can help fix it and that may give her the little bit more inspiration to excell at it. Plus it looks like fun!

