What restrictions should I put on my daughter's laptop?

My 11-year-old daughter finally saved enough money to buy a laptop. I helped her purchase this one.

I am strongly leaning towards putting Linux on it. I haven’t used Windows in years, but I use Linux every day and I feel better about configuring and securing it. All of the programs she is interested in run perfectly well on Linux.

I work on the internet so I appreciate all the good that is out there, but I also know that there is a lot of nasty stuff that I would like to protect her from. I let her use our home computer, but that is in a common area that is easy to supervise. I’m happy to give her the freedom of a mobile computer, but I also a bit guarded.

I want to know three things:

1. What kind of rules/policies do you recommend?
2. What kind of software should I install (parental controls, time restrictions, etc.)?
3. What other precautions should I take?