Is it permissible to pray in front of one's wife while she is wearing underwear?

The worshiper must have khushu' (devotion/concentration) in their prayer, for it is the spirit and essence of prayer. The Prophet, peace and blessings be upon him, once prayed in a khamisah (a black woolen cloak) that had markings. When he finished, he said: "Take this khamisah of mine to Abu Jahm and bring me Abu Jahm's anbijaniyah (a thick, plain cloak), for it distracted me just now from my prayer." He also said: "I was looking at its markings while I was in prayer, and I feared it would distract me." It is also narrated from Abdullah that he greeted the Prophet, peace and blessings be upon him, while he was praying, but the Prophet did not return his greeting. He then said: "Indeed, there is an occupation in prayer." This means that the worshiper should be engrossed in their prayer.

Looking at one's wife may distract the worshiper from their prayer. If the gaze was sudden and unintentional, and then they lowered their gaze, there is nothing wrong with that. However, if the gaze was intentional and prolonged, then at the very least it is disliked, due to the arousal of desire and the loss of khushu' it entails.