grkbuckeye,
Everything written above applies if one or more party is in the early match run by SF Match. If both partners are in the regular NRMP March Match, you can couple match.
Does it guarantee you of being in the same city? With couple match you submit a _paired_ rank order list. For every program on partner #1's list, there is a linked program for partner #2. The couple match guarantees that you will only match into one of your linked pairs. If you only put in same-city pairings, that's all you will match into. (So, no, it is not a built-in guarantee, but you won't match at different cities unless you are willing to do so.)
As for the couple match algorithm itself, it runs just like the regular match except you must both be offered positions at the same place. If you get offers from programs #1,3,5,7,9,10 and your wife gets offers from 2,4,6,8,10, you both will match to #10.
There is a much better explanation of the above at
this link. The <a href="http://www.aamc.org/nrmp" target="_blank">NRMP website</a> has excellent info about the match in general. The couple match info is so-so but unfortunately the best I have found. I know of no other couple match info on the web except this bulletin board.
The couple match definitely maks life harder on you. Couples should rank many more programs than a single individual. If one partner is applying to a competitive field/program, the couple match adds another layer of complexity on top. I hope this doesn't sound too dismal. I am not anxious in the least about trying to couple match next year -- it's just one more factor to consider.
Does that answer your questions?
PS. Little known fact: any two people can couple match. No romantic linkage required.