Depends on whether your wife is just playing files thru iTunes, or using iTunes to transfer files to an iPod. If she just plays the files thru iTunes, then she can use the 'her name's LimeWire Tunes' playlist which shows up in iTunes if you've got iTunes sharing enabled within LW.
If you don't see the shared 'LimeWire Tunes' playlist in iTunes, let me know which version of LW you have & I can give you more info!

In that case she wouldn't need to have the songs added to the iTunes library (and so saved on your HDD, within My Music)... LW's playlist would be enough.

If she's using iTunes to add files to an iPod, the songs have to be added to iTunes library first. And that means the files will be saved to your HDD (My Music\iTunes\iTunes Music) for iTunes.

Hope that answers your question (& I haven't confused you). If not, post back