Are you sure there's no chlorine and chloramine in the water? I doubt it 'cuz the anemone would have died by now, but it's just another thought.
Your salinity level is perfect

I'm not sure if your LFS explained this to you, but after you mix a new batch of water, you absolutely must make sure that not only is the salt dissolved, but the ph and temperature match your tank water. Most people aerate their water for 24 hours to ensure this. How are you mixing your new water? You generally put a powerhead in there and just let it run for quite a while. For this any cheap powerhead will do. I remember the owner of my LFS told me to just mix it for a few minutes with my hand and the water would be fine. NOT! :eek2: :blown:
Try to arrange your rock so that you have open spaces, caves and the like so that water can move and around your rock.
dbdisok makes a great point about the skimmer because they pull out nasty stuff before it breaks down and creates problems in your tank. Sometimes one problem beginners have is trying to run their tank with a cheap skimmer because dang it, good ones are expensive unless you find someone selling a good one. My first skimmer was a Seaclone and they're not very good...but, it's better than nothing. In fact, if you want to pay the shipping, you can have mine for free (shipping probably wouldn't cost more than $10.00).
If you don't have the money right now, using my Seaclone would help just a little bit, and it would contribute to aerating the water...

Sometimes people save to buy a good skimmer instead of wasting money on a junky one, which is a smart idea. If you have to spend money, the skimmer is one of your most important pieces of equipment. On the other hand, many people run their tanks skimmerless and their system does fine. So much of this depends on your husbandry.
Please don't be alarmed regarding the algae outbreak on your sandbed because this is normal when new tanks are being established.
I feel for you guys regarding wanting to quit--I recently lost my prized anemone and actually put all of my system up for sale because I too have been having issues with my tank, and I've been reefing for a while now. A few people here on Rc calmed me down, and I'm glad they did because this can be not only addicting, but you get passionate about it.
rayn made a great point regarding the powerheads. The better the powerhead, the fewer you need. Go to some of the online, reputable stores and you'll see an array of powerheads. Some are MUCH better than others. And of course, as usual, the really good ones are expensive.

Generally however, one really good one is better than 2 not-so-good ones.
I really believe you and your wife will be successful with your tank, just hang in there. Take time to read the through the beginner threads and stickys because there is an enormoust amount of great information in them.