100% it depends on the dealer. You can get screwed, big time by the wrong type of dealer.
That being said, even the good ones you are going to be paying a bit more (or a lot more) depending on the vehicle unless you know someone on the inside and get a smoking deal. They have overhead and a bunch of other stuff they are making up for that the private seller doesn't have. Dealers mark up vehicles, it's not a secret. Some more than others. Private owners don't, except for these guys that put a bunch of money into a vehicle and think they are going to get that back out when the sell it.
Dealers are good in the fact that they have a LOT of lenders working with them so it is almost impossible to be turned down for a loan if that is the route she is going. Unless her credit is completely garbage, she shouldn't have a problem getting one of their lenders to throw a bone. Hell some will do it no matter what your credit is like.
If you hit a real dealer, most of the big ones inspect their vehicles and put a warranty on them. Not the usually the shady used car lot ones though.
To be honest, I would just stick to the main ones. If she is looking at a Ford, go to Ford....Chevy go to Chevy, etc. The dealers keep the good trade ins and dump the bad ones (or ones that need a bunch of stuff) to the auctions or the local wholesale markets. The small used car lots are the ones that usually buy the crap that the big dealers don't want for various reasons (high mileage, to much work needed to bring it up to their standards, too old, etc).
Eg: We got a trade in here a couple months ago. It was a Cayenne. The first owner beat the s**t out of the thing. It needed all kinds of stuff so we ended up sending it to detail and then dumped it in the local wholesale market through the internet. Just last weekend some young dude brings in that same vehicle that he landed at a used car lot up in the seattle area. It's having cooling issues (one of the things noted on the trade in inspection from when we had it that the used lot didn't care to disclose). That lot had picked it up through our online wholesale site according to the used car manager. It needs a lot of work and the dude is shocked because he bought the thing for cheap and it needs over $10k in work to bring it back to a decent car (tires, brakes, drive line, coolant system needs fixed, nasty leaks from the rear main, valve covers, runs like s**t, Airbag light is on, etc). Like they say, if it's too good to be true....
At least he can act big to his friends and the chicks and say that he owns a Porsche.
I would say find out what she wants and shop for it, not committing to either or a private seller. Set a price you are willing to spend and stick with it. See what happens. If she finds one she really likes and it checks out through a thorough inspection it doesn't really matter where it was from. If she is happy that is all that matters. Good deals and great cars can be found at either one.
Good luck through this process, it can be really frustrating. Dealership and private party buying alike have many pros/cons; pushy salesmen can be really annoying but equally are those private parties trying to hide stuff or overcharge you for what they think it's worth. In the end I agree with Lethal in the sense that you should set a price and go in knowing what you want, and don't stop until you get just that. Looking forward to seeing a fit on the site though hopefully. 
