Nah, I've proof-of-concepted this before on an old PC. Evolution, Pidgin and Firefox serve essentially the same function as AOL, just without consuming a fuckton of memory and wrapping the infamous AOL "Claw of Death" over various system choke points.
I figured out how I'll do the VirtualBox thing, I'll just direct the guest Windows XP OS to store the \Documents and Settings folder on the shared drive. That will in turn point to a folder in the respective /home folders, which also gives them the benefit of keeping their files separate (my dad is afraid to do ANYTHING because my mom just tosses important files willy nilly in My Documents).
I'm also putting the /home folder on a separate partition, so upgrades and restores won't be such a Sisyphean tragedy.
Ultimately, the system is going to be WAAAAAY faster and a lot easier to manage. My parents have already expressed an interest in getting away from AOL, as it's now more of an advertising service than an Internet... whatever the fuck AOL used to be. AOL stopped being cool when I turned 10, and it's been a real pain in the ass ever since then. Like, AOL makes EVERYTHING on the computer revolve around it. Wanna surf the web? Right as you go to click Internet Explorer or Firefox, AOL jumps in front like the fat kid that's sick of getting picked last. Think your anti-virus package is adequate? FUCK NO, AOL jumps right in with some McAfee shit and randomly-scheduled and completely uninterruptible malware scans. Accidentally double-click a MP3? Redirects it to the AOL Media Player.
Same with Adobe PDF Viewer. Somehow that just finds itself on every Windows PC, without ever asking. I'm sorry, but Adobe Memory Fucker 9000 shouldn't take two solid minutes just to display some 20-page report on the local dick economy.
The PC we're upgrading from is a Dell with 320 MB RAM, a Pentium III 600 MHZ processor, and Intel i810 graphics chip. Ha, the virtual computer I'm making for this has more horsepower than that. I've got the new computer assembled and Ubuntu is loading right now.
P.S. I didn't realize that a 22" monitor was so big. I mean Jesus, this is a bigass monitor. My dick isn't that big.