Ok, so test drove the following:
1) G650GS
2) KLR650
3) Pegaso
Our opinions from about an hour on each.
1) G650GS. Nee. Not for that price. Its actually not a bad bike at all, Far outclassed by the other bikes BMW makes but...
2) ...2010 Pegaso What a surprise! The was the best of the 3 for what we want to do, rides like an absolute dream, has plenty of low end punch with great handling. Light and agile.
3) KLR. This is a mans bike. My girlfriend hated it. I can see how this could be a great bike if you really want to rough it. Simple, functional but not what we are looking for.
Riding a Dakar tomorrow but I don't expect that her opinion will be swayed.
The Yamaha 660 and its variations share an engine with the Pegaso and I would consider these but they are out of budget.