Your make the tentative assumption is that her new beau has heard rumors about the co-worker and he's fishing. I think this is unlikely. If he HAS heard rumors and still asked her out, that would mean he's largely OK with it. I doubt he'd go fishing at that point by bad-mouthing the co-worker. He'd probably ask things like "Do you know X?" if he was fishing (and yes that would make him a wuss).

Therefore, I don't think he was fishing. I think he just really dislikes the co-worker.

Have you seen the movie "The Office?"

It is truly disgusting to like some woman only to find out she's slept with your office nemesis.

The only thing worse than finding that out is finding that out late or from somone else.

For her own good, she needs to tell him immediately with no details. He very well may hit the road - it's not simply insecurity; some things just have too big of "yuck" factor. But if he chooses to stay with her, at least this won't be hanging over their relationship head like the Sword of Damocles. That said, if he doesn't break it off, he needs to "man up" and not tease her or belittle her at all about the co-worker and she shouldn't tolerate it if he does. He either has to live with it or not live with it, but there is no manly in-between.