When it comes to what to do now, I think that GalaGirl has a fantastic approach which I would also endorse.
The lesson here, which is one we hear so often when it comes to relationships, is that stuff needs to be discussed with EVERYONE involved and highly DETAILED before any sort of commitment is made. Taking the word for it because someone may have hinted at you that it was ok, just doesn't cut it with issues that are so important, especially when it comes to moving yourself and family several states. This is your life and happiness at stake.
And it's not a question of not trusting someone's word - the saying is "Trust, but verify". One small conversation before you moved could have given you a heads-up to the fact that there may be an issue.
So you have been moved in together for 7 months and the wife is saying that she had no clue that you and he were having sex? How much communication do he and she have? Have you even had a discussion about boundaries for each of you, about safer sex practices? I am guessing that since this all seems to be based on assumption, there has been no such discussion.
Lots of issues, here, I'm afraid, a lot to do with the amount of time that has passed. I mean, if she didn't know, and he hadn't told her, then, from her perspective, he was cheating on her with you.... for 7 months...
Try to get this resolved one way or the other as quickly as you can so that you can start moving forward with your life, whatever that may end up being....
"Listen, or your tongue will make you deaf." - Native American Proverb