Doppler-enhanced self-diffraction in two-beam coupling experiments with sillenite crystals exhibits pronounced optical polarization effects due to the concomitant presence of natural optical activity and electric-field-induced linear birefringence. Coupled wave equations that describe the polarization properties, exclusive of self-diffraction effects, have previously been derived for the two principal crystal orientations most commonly used in photorefractive recording. In this paper, the coupled wave equations are combined with a linearized model of the photorefractive recording process (single trap level, single mobile charge species) to analyze the impact of self-diffraction effects on the polarization state evolution. Numerical solutions of these equations yield optimum configurations for enhanced gain and improved image contrast in two-wave mixing with such materials. In addition, inclusion of optical activity in the model emphasizes the contribution of this effect to the apparent reduction of the effective electrooptic coefficient of bismuth silicon oxide crystals.