My friend, who emails me a lot, seems to have a problem with her computer. When she emails me (or anyone else) "fake" email addresses also appear and the message seems to go to everyone - real or fake email addresses too. The email addresses take this sort of form: lastname@chococat.sd.dreamhost.com

It seems to happen that when she is sending an email, perhaps replying to one sent by someone else, the last name of the recipient is turned into the above email address and the first name is associated with the actual email address.

Is this some sort of virus or other problem she should be worrying about?

Hello Katie,
Your computer friend is corrupted with trojan's horses, many of them are spreading via emails and you are not afraid to open it as generally all the address book of the victim is used to send fakes, with attached files, in the matter of the fact you read the mail coming from a friend of your, you don't pay any attention.
Suggest your friend to download as soon as possible this excellent program called:
Trojan Remover 6.16
this program is a 30 days trial freeware, but fully updated with the mosts recents trojan's signatures ready to use.
Read well the "helpme" file in order to use correctly the two scans of the program: one to check for malicious trojan's signatures in your computer memory, other one to hunt, detect, and eradicate the worm hidden somewhere into your hard drive....
Good computing.....