J.P.
In my family, godparents were more like aunts and uncles. They attended all the important events in our lives (although most fall down on the job, my sister's godfather filled in for the both of us), and were truly family, even if they weren't blood. The main reason behind godparents is to ensure the continued religious worship, but it can be what you make it.
Some gift ideas would be a crucifix to hang above their door, their "first bible" - they have some board book ones, and there are plenty of Precious Moment and other ideas at stores either retail, or at your church.
The point of godparents isn't for the gifts, but for the relationship. Ask your friend if she has any expectations, other than you being a part of her daughter's life.