Finally got the chance to take my wife out for a spin yesterday.  Handled really nicely and had plenty of power.  My only beef about the two-up riding is that the backrest actually reduces the total pillion space available for the passenger by about an inch.  

When my wife and I ride together, it tends to shove me forward and make me more cramped.  If the backrest were back a little farther, it would make my ride more comfortable.

I'd love to find a way to set the backrest back a little farther, but I don't know how feasible it is.

Remove the backrest.

Give your wife her own Savage

Greetz
Kropatchek

Send her to the MSF basic class -- they provide little non-threatening bikes, she'll be with others who as just as new to riding as she is, the instructors have been there, done that, and will encourage her past any fears or failures.

try to find her an all female class, that's even less threatening, once she sees that other women have the same problems and concerns it will build up her confidence