160 is
overweight for someone 5'2". For someone 5'2" a weight of
101 - 136 is okay, maybe a little bit more or less. I am, in fact, the same height as her and only a year older.
Remind her that being on a 1000 calorie diet is
very unhealthy!

She should at least have a intake of
1500. In fact, if you don't eat right it can cause your body to acctually gain weight.
I myself am going to a women's health club called Curves ( see
curves.com) to loose a little bit of weight. You should be glad she doesn't want to be unhealthy and she wants to excersize. If you can't afford a treadmill, encourage her to run. Also tell her to drink plenty of water.
=) I hope I was able to help! Good luck! <3