dual citizenship possible?

I tried searching and reading, but there's so much info out there it gets confusing quick.

My wife's grandfather has dual-citizenship with USA because his (her great grandfather) was born in USA. Does this mean that her father is eligible, with in turn means that she is eligible?

Could be. But generally, for transmissable citizenship, the US citizen has to have spent 'X' amount of time in US at some point before/after child's birth, and the time has varied over the years. Confusing, yes.