Preparing iMac DV for donation

I have an iMac DV, running 10.3.9, that I am planning to give to my daughter. This Mac has not been connected to the internet since December of '05 when I got my new iMac, therefore it hasn't received any software updates since then. I'd like to have the updates installed before I ship it to her. Do I need to download all of the Security Updates to my current iMac and install them, or do I only need the latest one for Panther that just came out?
I'm also unsure how to handle the accounts. I'm currently the administrator, but I want to delete that account so that when my daughter gets the Mac she can set up herself as administrator. Is that possible?
Any help would be appreciated.
iMac G5 iSight   Mac OS X (10.4.9)   iPod w/color 20GB

Niel,
Thanks for the quick response and the help.
I want to be sure I understand correctly. After I install the security updates and follow the instructions you linked to, ship the Mac to my daughter, when she starts it up my admin account will be gone and she can create her own admin account at that point. Is that correct?
Thanks again.

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