That computer is most likely infected with malware and the best way to find out how to fix it is to post a HijackThis log. Reinstalling/repairing IE seldom if ever works and is pretty problematic as yo've already seen. Most malware is designed to affect IE, and lately has caused problems like you describe. You'll be beating your head against a wall if you don't get the malware removed first.
What I suggest you do is install an alternative browser on you wife's PC so you can deal with this more conveniently. Firefox is pretty easy and small, download it to your Pc, then transfer it over to hers and install it.http://www.mozilla.org/products/firefox/
Then click on the link below and follow the steps in that tutorial so you can get a log posted:How to post a HijackThis Log
You can of course skip step 1. But be sure to follow all the other steps and use the links in the tutorial to:
1. Download the self-extracting HijackThis.
2. Open the HijackThis Logs and Analysis forum to start a new Topic in that forum. It is important that you post your log into a new topic in that forum. If you have any problems here is a link again:http://www.bleepingcomputer.com/forums/ind...?act=SF&s=&f=22
It may be a day or two before you get an answer. But it is also important that you not post again to the topic you started asking for help or wondering if you will get help or otherwise "bumping" your thread/topic. In order to work on a first come-first served basis, helpers look for the oldest topics with zero replies.BUT,
once you receive a reply, stay in the topic that you have started. Do not start another thread.
Any problems with that, let us know. A log contains a lot of information and will save us from having to ask a lot of questions and will be the basis for other recommendations.