Tim, unfortunately, your experience with this type of machine isn't unusual. Tension is one of the trickiest things to adjust. I don't know what you paid for the machine but I doubt the store will take it back or help you. I would find a dealer and see if they can adjust it. They will charge a fee but it's probably worth it if they can get the machine to work and you can get some use out of it. It could be something actually caught in the bobbin mechanism, a piece of lint or plastic or packing material. Or you could simply be threading it wrong, and that is usually the cause of nesting.
What a sweetheart you are to buy your girfriend a sewing machine. Once you've gone step by step through the advice you are getting here, if it doesn't work, see if a dealer can't help you adjust the tension. If you decide to upgrade at some point, please consider going to a reputable dealer. You can get a nice inexpensive machine, used or new, and they'll service it for you.