OK, I gave this a little more thought since, last night, when I first replied, I was in the middle of some mild drama in my own situation.
What you have going here is someone who mentally and perhaps physically cashed out of her primary relationship - she was concentrating on finding someone else when you came along, is that right? Anyhow, she was just fine with her until someone else started paying more attention to her husband than she does.
In a perfect world you could do a flip. God knows I suggested it a dozen times. Let her be the secondary so she can pursue other relationships and so that you can form what you hope to be a more stable, healthier arrangement between you and her husband.
She's not going to go for it because she feels very, very threatened by you. Likely, instead, she'll start reminding him of all the reasons why they got together in the first place. If you're really lucky, she'll do this by text message when she knows he's in bed with you.
I don't get the sleeping together thing mostly because you're not dating her. I had the wifey suggest, via her husband, that she watch us one night while we were in bed. Oh no, no, no.
Let us know how things are going and I'd heavily second you finding a place of your own. This seems set to blow in a very ugly way.