This will be quite a long answer so bear with me.
The quickest way for her to become a British citizen is through the Spouse visa route as if you entered the UK as a Spouse, you can apply for ILR after 2 years (2012) and British Citizenship after having had ILR for 1 year (2013). However, I would say that the chances of her being a British citizen by the 2012 Olympics are fairly slim as she has not yet started to accrue her time here as a Spouse. This 3 years will therefore need to start and obviously won't be completed by Summer 2012.
If you go down the Tier 2 route, then this time can be counted together with the previous time on a work permit to enable her to apply for ILR after 5 years. However given this 5 years didn't begin until February 2007, she will not be eligible to apply for ILR until February 2012. She will then need to have ILR for one year before she can apply for British citizenship which obviously means this will not be until February 2013 at the earliest.
Whichever way she decides to apply, I'm sorry to say that under the current rules she is not going to be eligible for British Citizenship until 2013 at the earliest. She will be able to get her ILR by then, but not to become British by then.
The athlete can switch to a Tier 2 as opposed to a Spouses visa if she wishes and providing she gets her application submitted before her current leave expires, she can make the application from here (as she can with a spouses visa application). Do consider though that if she is planning to marry this summer anyway and is in a genuine relationship, it would be in her interest to apply for a Spouses visa as this is much more straight forward and far less restrictive than a Tier 2 visa as obviously under Tier 2, she can only work for a specific employer doing a specific job and she will need to show that she has a certain level of skill or qualification to satisfy the Tier 2 criteria. If she switches to a spouses visa, she will have the freedom to work in whatever job she chooses and to move employment when she likes.
It is up to her which she chooses to do but the law as it stands does not allow for her to obtain British Citizenship before 2013.
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