Transferring Phone Ownership I currently have an HTC Desire handset. I am just about to upgrade to a new HTC handset and would like to be able to pass this phone on to my wife.

What’s the best way of changing the account setup n the phone to reflect the new ownership. I intend on using my existing Google account on the new handset to transfer my own settings over.

I would like to keep using the same Google Play account to retain the installed apps, but I would like my wifes telephone contacts to be kept separate and sync independently to my own as well as preventing Gmail emails on my address from pinging up this old handset.

Is this doable?

My current plan is to create her a Gmail account. On the existing Gmail account within the phone turn off syncing of Contacts, Calendar and Gmail. Add the new Google account and turn on syncing of the same.

This /sounds/ like it will work ok, but never having done this before I’m not sure how things will work in practice.
Yes, adding a second account and disabling sync on the original one will work as you are expecting.  You'll retain the ability to install and use apps you purchase with the original account, while having the sync enabled only on your wife's account will ensure the data from your own account is not present on her phone.