Leo says that an OCR (optical character recognition) program with a scanner will work. This will translate the documents into plain text that can be edited on the computer. Here's some OCR software options:
The scanner probably reset itself to the default settings. She changed the settings to what she wanted, but the change isn't taking. Leo suggests using the scanner in pro or expert mode, because basic mode will make choices for her. It also sounds like buggy software, so check for updates on the site. Remember that the scanning software that comes with the scanner is only as up to date as the day the scanner was built.
There's two ways to do it. He could do it manually, but with up to 300,000 pages, that would just be too daunting. The other option is to do it mechanically using a sheet feed scanner. He can put in hundreds of pages at a time. Now he'll have an image, not editable text. To convert these to text documents, he'll need to get optical character recognition (OCR) software, which comes with most scanners. That will go through it and do the best it can to transcribe it. There is OCR software that is specifically made to handle medical documents, so he might want to look for that.
Leo suggests using a service called ScanCafe for this instead of scanning them all in individually. For just 22 cents per image, ScanCafe will clean up the photos, correct them, remove dust and burn the digital copies to DVD. They will convert video tapes to a digital format as well. They even have a "shoebox" option, where they'll take as many photos you can fit in a shoebox for a flat rate.