CaptainMark said: Yes this is totally fine, you are after all charging for your services and labour rather than the product so legally you can do this.
Some words of wisdom from someone with experience in this: I've found installing Linux on peoples computers is fine for them as long as they are not expecting it to be the same as windows, if you just tell them that "It can do everything a Windows PC can do" which to you and me is true, the customer might get cheesed off when they cant double click the itunes.exe they downloaded and get their familiar music player. It all depends on what the customer is used to in the past. I would recommend using an OEM install so the customers can set their own user data and password https://help.ubuntu.com/community/Ubuntu_OEM_Installer_Overview and don't forget about the patented codecs and formats, your customers will expect their *.mp3 files to play without any hassle, and they will expect to be able to watch youtube videos without using the command line or install extra software, this is where it gets sticky, installing for a friend is fine but as a retailer you can you safely install patented software for profit, I don't know I'm afraid, I've only installed for friends and family as non profit. If you go ahead then I recommend the Linux Mint OEM install http://www.linuxmint.com/edition.php?id=112 , it works out of the box with codecs and flash and is easy to setup, its only available in 64 bit though and has no lightweight version so not ideal for very old hardware
EDIT: I just checked and installing patented software for other people is legal in certain countries, so depends where you live, in the UK its legal, also in Europe but not in USA or many Asian countries, see here http://en.wikipedia.org/wiki/Software_patent +1 Linux Mint OEM install is a good choice. An alternative is a standard Linux Mint version with no codecs, that you find at this page
http://www.linuxmint.com/download.php
You can deliver it without codecs, but at the welcome screen, the customer will find a *button to install multimedia codecs*, an easy one-click solution :-) See the attached file.
Unfortunately it is a little more difficult to get started with Ubuntu, but it is certainly also possible. The small company where I bought an Ubuntu computer sold it without codecs, but attached a *paper with instructions* how to install what is necessary to play video clips and DVD disks. It worked for me. At that time I had no Ubuntu Forum beans ;-)