I also stick to my iPod for audiobooks, especially when in the car. I agree that the Kindle is probably overkill. My mom wanted to listen to audiobooks too so I started her with an iPod shuffle. She liked it so much that then I got her an iPod nano so she could have more storage space for her music. Then I got her an iPod speaker dock so she can listen to her music without headphones. She really liked that gift.
Also, you should see if your mom's local library has audiobooks which she can download from their website for free. Audiobooks can be surprisingly expensive.