The second generation (94-99) and third generation (99-03) Outbacks seem to be the most notorious for head gasket failures, but there are a number of fourth generation (03-09) Outbacks with failing head gaskets. Over at the subaruoutback dot org site, there’s a log of about 30 pages of HG failures from members and almost all are in the late 90’s. The repairs can be anywhere from $800-$2000 and sometimes Subaru picks up some/all of the cost, sometimes not.
I have an 08 with 78k miles and (knock on wood), it has worked perfectly with no major issues but I am constantly keeping an eye on everything particularly for leaking fluids and checking inside the radiator. A couple of weeks ago, Click and Clack had a caller on their show with an Outback describing the “spike in temp” followed by the other symptoms and before she even finished her description, I said to my wife “blown head gasket”. Sure enough that was their guess too. It made me “appear” really smart to my wife!
The 07 should be good, but it might be a good idea for her to start a “head gasket rainy day savings plan” and save up until it reaches $2000. That way if/when it happens, she can say to the mechanic “I was prepared for that, when will it be fixed” with a smile on her face :).