Apple ID Issues - Says my email address exists, then it says it doesn't...

I'm trying to set up an Apple ID for my wife. We've been sharing my Apple ID for years but with the iCloud integration, it's getting too confusing to try and keep our contacts, calendars and other information seperate on our individual devices (we each have our own iPads and iPhones).

Here's the problem: when I choose "Create Apple ID" and go through the steps to create her profile, it comes back and says her email address is already in use and associated with an Apple ID. So then she tries to have her password emailed to her, but nothing ever comes. Ever. We've tried it numerous times, as well as checked her spam folder and nothing is ever delivered.

So she tries to retrieve her password by answering questions about herself and they come back saying that they don't match the answers on file. But.... and here's the strange thing, when she selects the option "Forgot Your Apple ID?" and answers the questions (first and last name and email address), it says they don't have an Apple ID on record that matches that.

This is an email address she has had for over 12 years... long before iTunes was even around and Apple IDs hadn't even been created yet. There is no way someone could be using her email address as their Apple ID, is there? It would explain why her name and other security questions may not match what's on file, but then why wouldn't she receive the emails about changing her password?

Has anyone ever heard of this? It is very frustrating and confusing at the same time...