I am not sure why you should think that installing Win 7 would remove the Factory Restore partition unless of course you formatted the partition at the same time. They are completely separate partitions.You could if you wanted set up yet another partition and then install another OS,as I have just done with a friends Vista laptop. He can now choose either Vista or Windows 7 at the boot screen.
You ask the question could you put te factory settings on your granddaughter's laptop? I am unsure as to why you would want to do that? Is there something tree that you feel your granddaughter is missing from her current installation as opposed to her previous one. I sure you can download any utility that she might have found useful from the Acer website.
Or am I missing something here?