This paper reports a study on the optical properties of molecular-beam-epitaxy-grown Si/Si1-xGex heterostructures reactive-ion-etched into nanometer-scale wires using both Raman scattering and photoluminescence measurements. The results show that except for a thin layer of disordered Si1-xGex alloy formed during the etching process, little damage was inflicted on the dry-etched sidewalls of the free-standing Si/Si1-xGex wires. With decreasing wire width, both dry-etching-induced strain relaxation and enhanced electron-hole droplet emission have been observed. The latter has been attributed to the lateral confinement of the wires which improves the nucleation of droplets. When the wire width is below about 40 nm, optical transitions due to quasi-one-dimensional confinement are clearly seen.