While iOS4 finally allows location to run in the backgroud, I think it only allows pre-running location to run. Meaning the program would have to be started by her any time her phone resets, constantly be tracking the phone, and would wear out the battery super fast. I could be wrong on this, but I have never personally come across an app store program that could do this.
If your wifes phone is jailbroken, there are a few apps that do this in a much better way. Ilocalis is supposed to be one but I never got around to trying any of them when I had my iPhone. Hope this helps!
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