I have a close friend that was in a very similar relationship. I don't think his girlfriend outright cheated on her previous boyfriend, but my friend did slowly steal her away (Mostly by being a nice guy... Her ex was apparently pretty flippant about the relationship, didn't really make her feel wanted...). But then, when the relationship went some what long distance (My friend moved to another town while she was still at college), and she was still around her ex, plus other guys who were showing interest in her, she got confused. Part of her was really enjoying her new relationship with my friend, but the other part was excited by all the attention she was getting.. new attention from her ex, from other guys, and and from my friend. She never really got a chance to be single and figure out what she really wanted for herself. In the end, my friend and her ended up breaking up. She wanted to have fun, let loose for a while, and knew she couldn't do that and date my friend at the same time.

My hopes for them is that once she's had her fun, she'll realize what a great guy my friend is and will go back to him on her own volition. Basically, what I"m saying, and I hate to say this, but I don't think it's going to end well for you in the short term. I think you need to let her go and have her fun, let her be alone, let HER decide, and simply accept what decision she makes for herself, without pushing her one way or the other. It's sappy, but it's advice I lived by in my dating days, if it's meant to be, it will happen. Maybe not now, but later. Personally, I would talk to her about an open relationship, if you would be comfortable with that. More like dating, not an exclusive "going steady" type relationship. But only do that if you can commit to not letting jealousy get between you and her. If it will, it's probably only going to lead to heart ache for both of you.

I wish you both luck. I feel for your situation. I hated watching my friend go through it.