adding a 2nd iPhone to iTunes??

here is the deal:

I have an 32gb iPhone 3G S that is associated with my iTunes on my home iMac. That is where all my music, photos, videos, contacts, apps, yada yada yada is.

I gave my wife a 32 gb iPhone 3G S for Christmas that I want to use the same iTunes on my home iMac so we will both have the ability to have the music, photos, videos, contacts, apps, yada yada yada synced with our iPhones.

When I plug in my wifes new iPhone, the iTunes "Set Up Your Phone" page comes up and it says:

An iPhone has been previously synced with this computer.
( ) Set up as a new iPhone
( ) Restore from the backup of [ Bo's iPhone ]

Neither of these are what I want to do. I want to sync a SECOND iphone to itunes.

How can I get it done???? Thanks for your help!