I heard that Aranea Lenith is a very powerful companion to have and I plan on getting her.

Does anyone know what apparel she starts with and if it is necessary to give her some better armor later on?

She comes with Blue Mage Robes, Boots, Iron Dagger and Staff of Frostbite. I'm playing a 2-handed Warrior on Adept difficulty. She often kills wolves and bandits with her frost bolts before I can get my sword out, lol. She also can summon a Fire Atronach, which helps a lot.

I have to say, on Adept, the two of us can feel kind of overpowered much of the time. But then, just as I'm considering sending her back home to her shrine, we meet up with a boos enemy at the end of some dungeon and she saves my butt. So I still have her.

I have had Aranea Lenith as a companion for a long time and only yesterday told her it was time for us to part ways. I agree with Pseron Wyrd that she is really powerful and has saved my life on many an occasion. The only problem is she sometimes takes the challenge out of the game so I'd ask her to wait for me at the begining of a dungeon, only going back for her if I was getting whipped.

I guess she'd be a huge help if you'd accidently unbalanced your game by levelling smithing too high.

Where is she to be found? And what makes her so powerful?

In my opinion it is the destruction/conjurer combo that she possesses. With that atronach that she dutifully summons you almost always have even to better odds with your opponents. Love her in draughr lairs where those things pop out in pairs and trios. Plus, she doesn't shy away from staffs. A melee character has little use for them but she wields them with a wild fury. Only thing to remember- completing the Azura quest is not easy. At least it wasn't imho.

Oh, she is that chick. I didn't remember her name, but now I know. Thanks. I haven't done the quest yet, but I have no clue. Once I am done with the DB I am on my way. Going to capture the soul of Titus Medes.