I worked in the US for a US company in 2006 (TN visa) for 1.5 months and filed a non-resident alien return as a single person.

I worked in 2007 in the US until the end of August (still on TN visa), then returned home to Canada and worked for a Canadian employer for the rest of the year. I had a similar monthly wage from both employers, so two thirds of my whole-year income is from the US company.

What should I do? (My wife is a stay-at-home mom with only investment income, no wages)
1) Claim treaty-based Canadian residency and file a non-resident alien return as a single person, or
2) File married/jointly with a W-7 ITIN application for my wife, claim myself as resident alien, and take the married-filing-jointly standard deduction, or
3) File Dual status, single resident from Jan-Aug and then single non-resident from Sep-Dec?

Does it actually even matter which choice I make, considering that taxes in Canada are higher, and what I don't pay to the US, I will pay to Canada? Please help, I'm so confused :(

Option #3 (filing as dual-status) is your only choice.

You have met substantial presence, so you cannot file as a non-resident alien, and you did not end the year in resident status, so you CANNOT file as a resident alien.