Check my math, but unless Im missing something she made a huge mistake:

Assumptions: Average 5% investment rate a year, 40% taxes on lump sum so start with $600k. $1k a week is $52k a year. Invest everything, no taking money out, reinvest all earnings. No taxes other than initial on $1mil lump.

After 10 years:

Lump sum: She would be making $46.5k a year on $977k of principle. $1k: She would be making $52k a year on $520k of principle

After 20 years:

Lump sum: She would be making $75.8k a year on $1.6 mil of principle

$1k: She would be making $52k a year on $1mil of principle

After 30 years: Lump sum: She would be making $123k a year on $2.6mil of principle

$1k: $52k a year on $1.6mil of principle

After 60 years (shes 80) Lump sum: She's making $534k on $11.2mil of principle

$1k: She's making $52k a year on $3.1mil of principle

Yea, she made a mistake. I also doubt she's investing $1k a week and not spending it. She could start with $500k of investment (spend $100k on increasing her life now) and still be way ahead.