Good to hear its back working. A corrupted collections file shouldn't affect the listing of your books (I've tested many corrupt files during testing and the Kindle just ignores what isn't formatted right), but obviously something prevented you showing your books if a reset fixed it.
The plugin uses different Customization settings for each Kindle attached. As Vaesse indicated, you could set up one custom column for your collection names, and one for your wife's collection names and customize the plugin to generate collections from the appropriate column when the corresponding Kindle is attached. Of course, you still need to have the books on the Kindle to have them show up in collections.
If you both have completely separate sets of books you could even consider using creating separate calibre libraries, although use of Restrictions and tags may be sufficient in case of overlap.
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