Hypersmurf, I wouldn't rule that way either (nor would my DM, especially since I wouldn't put it that way). To be honest, I hadn't even thought of that tactic (shows how much I don't know the fine tactics of RAW).
But, my thinking goes: The free trip attempt comes FROM the bite attack, and not vice versa. So, no free attack after the trip. The attack has already happened.
If the wolf wanted to do a trip attack, and then take the immediate melee attack from the Improved Trip feat, that's okay.
Hmm, never thought about a wolf's bite during an AoO, though. No trip attempt makes sense, they are just snapping their jaws at you.
So, removing that bite, trip, bite routine, would people allow wolves the Improved Trip feat (or the aformentioned slightly changed feat Improved Trip Ability) ?
Cheers