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I am a little confused about the purpose of a spousal IRA.

If I am the only wage earner in the family, do I have to open a spousal IRA for my wife in order to put money into it?

Can she open an IRA while she is still working and continue to put money into that account when she is no longer receiving earned income?

I believe that we can contribute $2000/year for her, regardless of employment status, but how do the mechanics of this work out?
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<<<<<
I am a little confused about the purpose of a spousal IRA.
>>>>>

If you earn $4000, you're allowed to put $2k in an IRA and your wife is allowed to put $2k in her IRA, whether or not she earned income. The "spousal" part just indicates that the owner doesn't have to have earned income to contribute.

<<<<<
If I am the only wage earner in the family, do I have to open a spousal IRA for my wife in order to put money into it?
>>>>>

There's no requirement that your wife have an IRA, nor that anything be contributed if she does.

<<<<<
Can she open an IRA while she is still working and continue to put money into that account when she is no longer receiving earned income?
>>>>>

Yes.

<<<<<
I believe that we can contribute $2000/year for her, regardless of employment status, but how do the mechanics of this work out?
>>>>>

Mechanics are no different based on employment status. The custodian of the IRA doesn't know or care about your wife's employment status.
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You must have earned income to contribute to a Roth IRA. I suggest you check out the following site:
www.fool.com/Money/AllAboutIRAs/AllAboutIRAs04.htm

I found it very helpful.

Good Luck
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