Hey Jodi. Tough spot she put you in. I agree that she shouldn't have involved you in her lies, although now that she did, what do you do?? The part of me that is against cheating is screaming for you to tell him. But is that the right answer? Obviously there are issues if she feels the need to cheat, but can you necessarily "blame" her when her hubby is being selfish in regards to her having someone else?
I know it may be difficult and you have a connection with him, but it may be best to step back so they can figure this out. Then when he's in a more stable situation the two of you can see if it's possible to resume where you left off. I fear that when he finds out you knew about it and said nothing, that's going to present a whole new set of problems for you.
*hug* Good luck and keep us posted.
Live life to the fullest 'cause you never know if you're gonna wake up tomorrow!