As long as your wife looks totally unpixellated in the original file you are fine. You would always make a print or so from that and not from the file that you compressed for web-showing, wouldn't you?
Or have you selectively brightened her figure - and quite a bit even? Was she much darker in the original pic? That might also account for the amount of noise (or pixelation) of her in the last photo.
Look how her head is all pixellated, you cannot even tell where her eyes and nose and mouth are. OK, mouth, yes.
The photo was saved at only 5 out of Photoshop, which is a low resolution. So THAT may be the reason for the pixellation. OR NikonD40x@Denver selectively brightened his wife's face very much against the background. I don't know. Do you see what I am talking about?
I used Nikon's Picture Project first to sharpen, so I think that's what did that....... If you actually click on my picture above and go to the link, I think it's not as bad or not there ata all