while this may be a late response, I'd personally go with the newest/biggest you're wallet can afford. Just so that it'll last longer and not become out-dated faster. The iPad 3 has the fastest processor which is definitely a major update. The apps coming out now are demanding a lot, and you will see a significant difference in speeds between the 1, 2, mini, and 3. I can't stand to use the original iPads/iPods with brand new games b/c of this "lag" i notice.
Also the best motto to go with electronics that can't be upgraded is: buy the highest end version of a model possible/reasonable. I say this because when you get something that you can't be upgraded later, you're gunna want to future proof it as much as possible to make it last longer. Also if your wife is not tech savvy she can easily get frustrated when something doesn't go as planned i.e. run out of space for pictures... This happened with all my cousins and their brand new iphones a couple years back, within 6 months they were like i can't put anything on here its being stupid. After I looked at it it was full b/c they didn't synch anything to their comp/icloud!
I would also like to point out that my iPod Touch 2 gen 32GB is full of music and my iPhone 4s 16GB is full of just apps, mainly games. Also look into jailbreaking the device when you get it, makes them worthwhile. Thats the only reason why I have any iDevices. They are wayyyyy cooler/customizable once JB. There is a tweak called Nitrous and for 99 cents it improves the speed of my iPhone significantly.
This is a cool article I thought was interesting and a good way too look at why you should avoid the cheaper end stuff with technology.
ignore the code: Crappy Computers
Just saw this...
We have both the iPad 2 and the iPad 3 with retina....
The big difference I see between the two is that the 3 has the 3G to be able to use the Cellphone network.
The display is better on the 3, but barely noticeable unless you place them side by side.
Also get the 32GB over the 16GB as the apps/music/video... add up quick then you have to manage the apps more.