iTunes sells apps for iOS based devices such as iPad, iPhones, and the iPod touch.
For iLife, for the Mac OS X you need to download from the App Store. You can access the App Store several ways.
One, cilck your Apple menu icon top left in your screen. Select App Store from the drop down menu.
Three, you can launch the App Store from your Applications folder.
The iLife apps are no longer bundled so you purchase as components, such as iPhoto, iMovie, and GarageBand.
RAD... try this.
Install the OS X Lion Update 10.7.2 Client Combo
That will reinstall the App Store for you which may help.
Restart your Mac after you install the combo then try purchasing an app.
If that didn't help, you should be able to purchase and download apps from the App Store without an Apple ID hassle. If it were me, I'd take the Mac back and explain the problem. You should be able to install the iLife apps using either your Apple ID or your wife's.