First of all: Your daughter's case is uncommon, but not unique.
There is a girl who has pretty much the same problem as your daughter, although she is grown up. It might give you an idea of how she might develop. Please don't be shocked, but it seems reasonable: http://www.bmezine.com/news/pubring/20061028.html
A second person is myself. I too started masturbating at age four, and I also did it at school, in class, in the first two grades. However, I always tried to conceal it, although I have been busted a few times (once even in class, but by a girl sitting near me, so the teacher thought she was making things up). I don't know why, it wasn't before the age of nine when I learned what it actually was that I was doing daily, often several times a day.
It may comfort you to hear that you learn how to control it over the years. I am 23 years old by now. I don't do it in Public anymore, although I'm still jerking off several times per day.
It doesn't interfere with my everyday life though, I am getting along quite fine. I just find it very hard in a romantic relatinship, as it soon focuses on my impulses, so I will become quite an annoying, sexually hyperactive jerk. That's why no woman could tolerate me longer than a certain time.
Your daughter will probably be a "sex addict" too, although her problem won't be to find a guy who can stand that, but someone who doesn't abuse it and tolerate it if it leads to adultery. You can read about that in the article to which I linked above.
She will have a difficult life. Psychiatrists may be able to calm her down a bit, and so will her growing experience with her problem. But you shouldn't expect her to ever be cured from it. You should concentrate on helping her find ways to live with it.
I hope I could help to a certain degree.
This discussion is related to 7 year old girl who masterbates at school