First off Jenny, WHO THE HELL INVITED HER TO THE WEDDING?... what table are you guys gonna be sitting at together? WTF?
First of all..... You need to ask FI if he NEEDS her in his life? His answer should be no... but if its yes... you need to let FI go! Oh I feel horrible saying that... but its you or her... I would scare the living heck out of him and tell him that... it might take a few days for him to realize that you arent going to be in his life but honestly, if you are going to be his wife you and your happiness is NUMBER 1 and if he choses her well... its better to find out now than later because it looks like this ex girlfriend thing is going to come up all the time.
As far as same circle of friends... umm this is not high school anymore, you and FI will find MANY other friends to hang with. You dont have to hang with your current circle of friends all the damn time. And if shes there I say ignore the biotch and FI better act nonchalant too... There should be absolutely no touching or flirting involved. If she crosses the line, FI need to get the courage enough to get her straight and walk away!
You seem to have been going through this for awhile now, FI probably knows that you are going to eventually give in so he is not going to get rid of his friend for you.... thats probably so blunt and mean to say... but I mean no disrespect. I have been in your situation about a "friend". And I had to nip that crap in the bud because I know that I want to be with someone who puts me first and wants to see me happy... A EX like that would not settle well with me. I encourage you to stand up for your self (especially if you are having negative feelings about this girl) and tell him HELL NO!