I have exactly the same car your wife has, a '96 with just 64k on it. My car acts the same way. When the car is in drive RPMs are at 500 and if feels as if the car is going to stall.
I had the fuel filter replaced and a MAF sensor replaced. They didn't seem to help. I've been told to replace the spark plugs b/c that may help. I also only use 89 Octane and above.
BTW, what is the IAC valve? Should I be looking into this as well??
Kenneth Clark