As for Rich's dilemma - should he say something or not - I think he should.
Thinking of my mates, it depends on the degree of trust. My best friend, for example, I would be perfectly frank that I think he needs to consider all the consequences ably summarised on this thread.
If it were a less close friend I would encourage him to talk to his wife, but reinforce that it's up to the 3 of them.
Either way, it's not for us to take a moral stance - the morality is all his and his wife/potential lover.
I would make this clear and offer any advice as a friend without being judgemental.