The interplay of phase separation, preferential wetting, and capillary instability in thin-film polymer blends is investigated using composition-profiling and surface-imaging techniques. The phase-separating films exhibit a unique morphology with two evolving lateral length scales at both the free film surface and the interface between the wetting and nonwetting layers. The short-wavelength mode shows power-law growth at both the free film surface and the interface, but with a smaller growth exponent at the surface, implying slower kinetics. The long-wavelength mode shows two power-law growth regimes separated by a plateau.