I got engaged last year to "Lynn", and we were completely happy until one night a party went bad, and alcohol and chemistry led my fiancee to cheat on me with someone she works with. At first I accepted that things happen. Then I began to get confused.
I told my girl I was not happy with their hanging out together anymore. She said she needed friends, it was a mistake, "please trust me". So I did. She is still friends with him and they hang out once in a while, to this day. I am thinking I should tell her to pick him or me, but that feels wrong. I know the value of friendship. But I also don't want my heart trampled again.
You are correct. You are wrong to feel that. Giving this harpy an ultimatum is completely wrong. What is right is giving her the boot to the ass that sends her flying out the door and bouncing off the curb. You don't believe me? Grab a motherfucking dictionary and look up the word "Cuckold".
You have no business trusting this woman. She has proved that all it takes is a little booze and she's ready to cough up the nookie to someone else just to piss you off. You want to be married to that? Trust, like respect, is always earned, never given freely.
You're being played the fool. She doesn't want to lose you, she just wants to keep you on the back burner until she can get a toe-hold in this other asshole's life. Soon as she does, it's your ass that's going to be bouncing off the curb. If she is unsuccessful, she's going to come running back to you until she figures out how to get a toe-hold in some other asshole's life.
There's plenty of other 'friends' she can go pal around with. Friends who haven't, nor will fuck her. There's a reason why she wants this one. It's because she's training your replacement.
Get rid of this cunt, then get your ass to nomarriage.com and maybe you'll be able to cure yourself of this bullshit permanently.