My niece is thinking about replacing her XP and I suggested she go to a Win 7. What is the easiest way for her to transfer her games and any programs and bookmarks over to a new computer?

Bets

I'd just install the games on the new computer as needed.
If she bought them as downloads, the site she downloaded from may allow more than one activation. I think Adventure Shop allows five activations. Big Fish I think is still unlimited, though you do have to install the client and redownload.
Most programs use the Windows registry and can't just be directly copied.

Most web browsers allow you to export bookmarks. For example here is how to export and import bookmarks in Internet Explorer.
http://support.microsoft.com/kb/211089
You can transfer the bookmark.htm file that exporting creates to the new computer using a USB drive.

Draclvr uses Easy Transfer, but I don't think it will transfer all programs.
http://windows.microsoft.com/en-us/windo...computer-easier

No, it doesn't transfer programs, but it will transfer things like user accounts, email, bookmarks and of course files. As you say, programs have to be installed anew.

How about games? Can the save files be transferred or would she have to start them all over again?

Save files can be transferred, so long as you know where they are. Most are small enough to be transferred with a USB thumb drive.