Well done. A few nitpicks listed below...
'Letter of sponsorship' change to 'Andrea J Ashcroft, U. S. Citizen, DOB 2 Feb 1970'
'Dear Sir/Madam' should be 'To the Entry Clearance Manager, British Consulate, New York'
optional: list of attachments, copy of lease, copy of landlord's permission etc etc
'Miss Ashcraft will not be expected to fund any aspect': too broad. 'Andrea's transportation, living and accomodation expenses will be undertaken entirely by me/(myself), and I have used the BUNAC tables to estimate an all-in incremental cost of £475 per month. According to her course of study at Leeds, my sponsorship will run for 12 months.'
'I Stephen Cousins am currently employed' becomes 'I am a British citizen employed by xxxx, where I have worked for the last 5 1/2 years. I have attached my most recent P60, and 3 consecutive bank statements demonstrating my capacity for sponsorship. (optional): Of course you have my permission to access my tax history if further evidence is needed.'
It's a rather daunting commitment, and they will probably need a liitle background on your motivation for this undertaking. A short paragraph along the lines of how you met and what sort of relationship you have. But it's optional.
'Miss Ashcraft is expecting to return to the United States' becomes 'I hope you find these arrangements in order and can proceed with successfully processing the financial and accomodation aspects of Andrea's application. She expects to submit her application on 2 Feb 2005, and if there is further information I can provide before then, please let me know. I prefer to be contacted via email at ----- and blah blah blah.'
It's up to her to say what she's expecting to do, not you. Your job is to establish both [1] credibility as a sponsor and [2] a plausible motivation for sponsorship. Best not to muddy the waters with commentary about what she intends or expects. They are very one-dimensional about these things, so stick to your role.
That's my take on it. You certainly don't need to hire a lawyer based on what I can see.
I would be interested in other comments!!!!