If she is not able to provide it to you, you can call AppleCare and ask for a replacement DVD for the Mac. The will ask for the serial number to be sure that you are getting the correct DVD. It will cost you a nominal fee for shiping and handling.
As you have discovered you really need this DVD.
You can get the gray install disks that have iLife on disk 2 by calling Apple Store Customer Service at 1-800-676-2775 They can send them to you for about $16 per disk plus S & H. Just give them your serial number and they'll know which ones you need.
Or you can order a Snow Leopard 10.6 install disk for $29 from the Apple Store. http://store.apple.com/us/product/MC573Z/A?mco=MTY3ODQ5OTY
To upgrade your iLife and iWork. If you only want iPhoto or other single apps from iLife '11 you can get them from the App Store after you've upgraded to 10.6.6. iPhoto, iMovie or Garage Band for $15 each and Pages, Keynote or Numbers from iWork '09 for $20 each.
If the MacBook is an older model the gray install disks will be for an older OS. In that case you would want the 10.6 disk. To see which model you have go to the Apple in the upper left corner and select About This Mac, then click on More Info. When System Profiler comes up check the Model Identifier and post it back here.
I went to the friend I bought the MacBook from. We found the two discs that came with it. I inserted Disc 1 and then shut the comp down. Started it up while holding C. Currently trying to install a second time. During the first install last night it never gave me a chance to change the name of the computer or wipe/save any old data etc. what am I doing wrong? I want to wipe ALL OLD DATA, including her name, and rename my computer to my name. None of her old passwords are working....I can't even manually delete her folders. How do I get a brand new fresh install?
Put your install DVD into the optical drive and reboot. As soon as you hear the boot chime, hold down the "c" key on your keyboard (or the Option key until the Install Disk shows up). That will force your MacBook to boot from the install DVD in the optical drive.
When it does start up, you'll see a panel asking you to choose your language. Choose your language and press the Return key on your keyboard once. It will then present you with an Installation window.
Completely ignore this window and click on Utilities in the top menu and scroll down to Disk Utility and click it. You should see your hard drive in the left hand column along with your other drives. Click on the drive and select the Erase tab. Set the format value to Mac OS Extended (Journaled) and click the Erase button. After that has finished select the Partition tab. Type in a Name for your hard drive and select how many partitions you want from the Volume Scheme. The usual setting is one partition. Click on the Options button after you've selected a partition to make sure it's set for GUID. Then click the Apply button and after the Partitioning is done quit Disk Utility.
You can now follow the instructions on the install screen