" is getting Arizona tax withheld, not Oregon."
Since the work is being done in Arizona, this is normal. She could ask the employer to also withhold Oregon taxes but they are not likely to do it.
When she enters her data into TurboTax, she should do her Arizona return first as a nonresident, then do her Oregon return as a resident. This enables TurboTax to calculate the Arizona tax paid (as MaryK noted, she owes tax to the state where she works) and then TurboTax will use that AZ tax paid as a credit in OR.
NOTE: it doesn't matter if she gets a refund from AZ; it only matters that she paid tax (like, through her withholding). Look at line 61 on the AZ 140NR, not lines 67 and 68.
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