A little information can be damaging. I have seen many folks who are attempting to improve their credit scores, pay credit cards down to zero and not see improvement to low scores.
If you don’t care about your credit scores and want to pay your cards down to zero, go for it, as it doesn’t matter to you. However, if you want to improve your scores, leave a SMALL balance, the credit bureaus love that and it will have a positive effect on your credit scores.
ANY debt is bad debt.
http://finance.yahoo.com/news/8-common-credit-myths-debunked.html
As for this article, it's partially true but very misleading. Having 0% utilization is actually looked upon somewhat negatively but that does NOT mean you have to carry a balance. Simply using your card and paying the balance every month is sufficient. In fact, that shows very responsible use of credit.
It sounds like what happened is that she paid everything off and then didn't touch the cards. You then either re-pulled the credit after she got her new statements or you ran a rapid rescore. In that case, yes, she would have been hurt. In my experience, 1-20% utilization is considered an "A", 21-40% is considered a "B" etc. 0% is considered a "C." But you can EASILY get around the dreaded 0% utilization simply by using the card and paying off the balance every month.