Small Knot is riding my Kona Dew now. It has the slanting top-tube which makes size adjustments pretty easy. It is a flat-bar bike, but has 700c wheels. The LBS called it "bomb-proof" and so far SKnot hasn't done it any irrepairable harm. Kona makes tough bikes. $400, and I'll get it back when he's outgrown it. (it is my commuter) I've seen Kona's kid's road bikes, they really are pretty good! SKnot is too big for them now.

Is she comfortable with drop bars or would she prefer flat?