When I've talked to IRS on the phone, this is what they told me.
Please Download the following from IRS website
www.irs.gov
W7 Form Purpose: Get ITIN for wife.
Publication 519 Purpose: Page 10 tells how to make election to treat
non-resident Alien Spouse as Resident Alien, this makes it possible to
file joint return.
Form 2555 Purpose: If you make election to treat your wife as a
resident alien for the whole year than she and you will be taxed on her
worldwide income, i.e., her French wages. Filing form 2555 will exclude this
income from your taxable income.
Publication 54 Purpose: To explain form 2555.
If you will still have questions after you receive this please call
1-800-829-1040 or see a tax preparer.