Hi G.!
First of all, props to you! I know how hard it is being a single mother, and you need to give yourself a pat on the back! I was in this same situation growing up, and barely knew my father. I would get a phone call from him every once in awhile, but rarely seen him. He remarried after my Mom left him, and he started another family. Not til I was 18 and pregnant with my oldest daughter, did I spend any real time with him. I agree with the other gals, that honesty is definitely the best way to go, but a little at a time. I wish my mom had told me more about him when I was younger, as I had this fairytale in my head, and he ended up being a very abusive man, and he sometimes seemed crazy.
Just always remind her that you love her more than both a mom and dad could. Someday, you'll meet the man of your dreams, and he's the one that your daughter will remember. My oldest daughters tell me that when they get married, they want me to walk them down the aisle, as I've always been both mom and dad to them. Anyone can be a father, but it takes someone special to be a daddy! The fact that you asked this question, shows what a great mom you are!