Plantguy,
You didn't mention how long she has left on her H1B. Also, have you applied for PERM already, or are you just at the investigative stage right now? What is your birth country? (this makes a difference in the wait time) What is your wife's job? Does she qualify for a TN?
If your wife leaves the H1B sponsor, and gets a TD, keep in mind that she will NOT be able to work until she gets an EAD. If this option is acceptable, then you can proceed. Keep in mind that the timeframe between starting PERM and getting an EAD may be a few years depending on which employment based category you are applying in, and even longer if you're from India, China, or the Philippines based on the current processing dates and priority dates. So, plan your finances for the next few years accordingly.
She should keep her H1B as long as she can, or at least until you apply for your last TN (i.e. right before you apply for your I-485, when your priority date is current). Explicitly voiding her H1b before that step does not provide any advantage to you, since it may be a few years before you get to that step. If it expires before that due to the 6 year limit, then you should have her apply for a TD ASAP.