My wife and me are international students and have F1 visas. My wife is a resident alien, lives in MN. I am a non-resident alien live in NY. We intend to file the tax under "married jointly" category. We decided to file my status as resident as per Publication 519 for Federal return. My problem is what form should I select for NY state return. Can I file IT_203 form as a "married filing separate" for this?

You should file jointly for both states, but pay taxes ONLY on incomeearned in each respective state.

For NY, Form IT-201 is the form to file.