Hmm, you definately need to undo what the Time Machine app did, and that might include a re-format. Your other option, which has its potential dangers, is to use a third party software (like good 'ol Partition Magic) to resize the Time Machine Partition, and making space/partition that Windows could use.
My Fiance is an art student, and she uses Macs (or rather, Final Cut Studio) for most of her school work. She has an external hard drive that is formatted to Fat32, in case she needs to shuffle work from her XP laptop to her iMac in her office.
I'll edit this post, or I'll repost when I get to talk to her later on today about your situation, since she's my resident Apple expert.
EDIT: Okay, so I realized that Partition Magic has no support for either HFS or HFS+, which are the file system used by Apple, so that option is out.
But, your wife is not that unlucky. You could use
MacDrive 7, a commercial software that allows windows machine to both read and write unto a HFS(+) file system. It's free to try, $50 to buy. Try that and see if it works.
Hope that helps out
