Whats the point of this app when you have find my iphone->on in icloud?
So my wife and I each have an iPhone 5 and our own seperate iTunes accounts and iCloud accounts. Is it possible to set up Find my iPhone on both phones and use one to find the other? I am confused because it seems that you need to be using the same iCloud account on each device but the screenshots for the app show several phones with peoples names next to them. Is this not possible?
No, you will need to be on the same Apple ID account. An Apple ID supports up to 5 computers and 5 iDevices connected to iCloud. If you want to use two Apple IDs you will need to sign in to hers to find her iPhone and sign in to yours to find your iPhone