Happily Married Man,
In response to the issue of friendship, you responded this:
>>"How is this woman a good friend to my wife if she can offer her self to me",<<
This is exactly what I, and I'm sure others reading this thread thought. This lady is showing herself to be a very undesirable "friend" and "wife". It worries me if she contiues her pretend friendship with your wife, and what she might possibly do in revenge if she doesn't get her way.
Perhaps at some point the best way would be to tell your wife what has been goig on to prevent any damage by this woman. Unfortunately complete honesty isn't always possible, as some people become threatened by it. I'm not saying this to disparage your wife, but I know it would be for me.
I am personally acquainted with a case just like yours, and the pain and treason was horrrible. I believe if someone had been sincere and just put a complete stop on all communication lines, much of it could have been avoided, at least for one of the couples. Instead, they gave in and two marriages were destroyed and years after the consequences are still with them.
You need to not only protect yourself, but your wife as well. As for the other man, boy he needs prayer!
You show wisdom in how you are handling this and in asking for advice from others.
Blessings to you.