I have put together picture montage videos for friends' weddings, two funerals and my in-laws 50th wedding anniversary. They have always been a huge hit (with the receipients and the guests) and extremely appreciated and enjoyed over and over again.
I did them myself but I know you can also pay for this service. I used Photoshop Elements but there are a lot of other products out there. It was very time consuming (sorting through pictures, scanning them, organizing, choosing songs, etc.) but it was so worth the effort. At my in-laws anniversary party it was shown (as a surprise) after we cut the cake and I don't think there was a dry eye left in the room when it was over. A couple weeks after the party, my MIL told me they had watched it just about every day since the party.
I included a note in with the party invitations that told the guests about the surprise video and asked them to email or mail me any special pictures they might have of the couple - together or individually. I also told the guests there would be a special anniversary box at the party for them to drop their cards, stories, etc ... anything that would help the couple in their "walk down memory lane". I also told them these could be mailed to our home if they couldn't make the party. I bought a wooden box at Hobby Lobby that was also a picture frame on top and put some of my favorite pictures and their names. We presented the box to them before the party and the guests dropped their cards, letters, etc in it when they arrived.
If you'd like to see a couple that I've done, I'd be happy to send you a link to where I have them uploaded. Just send me a PM.
It sounds like you are a good friend ... my sympathy goes to your friend and her dad.