hi, if i'am right
if your wife came on a 2 yr spouse visa and your wife came to the uk on the 16th of oct 2006,then she can apply for ILR upto 28 days before 16th of oct 2008, but from what you said the visa was issued on the 8th of sept 2006, so it expires on 7/8th sept 2008?, so her visa has expired before she can apply for ILR , as the earliest she can apply for ILR is about the 18th of sept 2008.
yes your about 10 days short, but in my case it was like 6wks, and i had to apply for FLR to make up the time.
but in your case its only 10 days they may use thier discretion, and allow your app, but they are strict about the max of 28 days for ILR.
if i was you, i would phone ind, at least 2 times to ask a different person, as i've phoned a few times and they might give you different answers.
if you do need FLR. then you might be able to do it before the 1st of april b4 they push the prices up. as you can apply for FLR at anytime.
good luck hope you dont need to apply for it,. warning to others thou, come to the UK within 28 days of the visa being issued, and if i remember right you can actually come to the UK upto 28 days b4 the start date the visa was issued. or it could cost you