Surly's Troll is a 26" wheel rigid bike that might work if you put skinnier (26" x 1.5" or less) road tires on it. Not sure if there are any other brands that sell a rigid-frame bike with 26" wheels.

Also try and see if Cannondale still sells the Hooligan. Its a 20" rigid-frame 'city bike' similar to the Bike Friday folder SixtyFiver posted above, but he frame is solid.

Is toe overlap really that much of an issue? I have a single speed that has a real toe-overlap issue, but I never have a problem with it - if your wife rides at any level of speed and leans into the corners while turning she really shouldn't have an issue with overlap and 700c wheels.