Re: Let his daughter sleep in our bed
I was sexually abused as a child, yet still think some of the responses go a LITTLE overboard. Yes, its wrong, but you can't just assume that it has led to something beyond what you see. Yet you owe it to demand some private counseling for the child. Problem is, in most states, if you call state services, you you will start a process that will destroy trust, and you cannot salvage your marriage. In my state, just my son's comment, overheard by a teacher, about feeling depressed, took away our rights as parents. He was joking, but I had no choice but to let the state do what they wanted to do for the next year.
That said, I've been disappointed to find that some former acquaintences consider behavior almost as bad as your husband's to be appropriate. Its more common than you think. Personally, I think it alters the girl's perception of boundaries. My advice, though, is to tell your husband firmly that you will not put up with these missing boundaries in your house. Give him two weeks, and tell him that one of the two of you will leave AND you will call the authorities. Give him a little time to come to the right decision.
When something sends signals like this, stand firm. Hopefully, you'll find that your husband is just being very naive, and you two can work through this. I completely understand your revulsion, though.
If he chooses to address the issue, please demand that the child sees a counselor for a while. That's the only way to be sure. The counselor will notify the state if something inappropriate is suspected.