Okay, the 1/4" of play:
You are facing the driver's side tire, place one hand on the left side of the tire, and one hand on the right side of the tire (9 oclock and 3 oclock). When you wiggle it back and forth (towards the motor and away from the motor), there is a 1/4" of play. See, in my car, this would be an indication that the tie rods need replacing, but I wasn't sure if Subarus were the same. The coil/strut, and mounting bolt also rotate about the same amount relative to the tire's play.
When the noise happens, its pretty much a grinding, and then a growl, and stops after the turn is completed. It doesn't happen every time either, just time to time, but is becoming more frequent. It comes from the very front of the car, and she says it started at the driver's side and has gotten worse, and now happens on the passenger side, but is subtle so far.
The car is a 1994 Subaru Legacy wagon with 135,000 miles, and the 2.2L H4 engine. I'm not sure when the brakes were done, probably not for a while. My grandmother owned it before my mom, so I really don't know.