I lost no data when updating two iPhones and an iPad.
Tell your wife to quit the app that lost the data then reset the phone. Do it like this,
Go to the Home screen and double click the Home button. That will reveal the row of recently used apps at the bottom of the screen. Tap and hold on the app in question until it wiggles and displays a minus sign. Tap the minus sign to actually quit the app. Then tap anywhere on the screen above that bottom row to return the screen to normal.
Then reset the device. Press and hold the Home and Sleep buttons simultaneously ignoring the red slider should one appear until the Apple logo appears. Let go of the buttons and let the device restart. See if that fixes the problem.
Thanks for the suggestions. My wife swears she had the app in question closed. While I don't think I've ever done what you suggested when updating, I've ALWAYS tried to do a backup before proceeding with an iOS update and so far, have never had a problem. Maybe this will teach her a lesson about backing up.