She cheated, but at the very least, she confessed about the matter. Of course, like many said above, things might have went further than she is willing to say. She might not be willing to come to terms with what she has done.
As David Eagleman said in Incognito, the brain is like a democracy with many competing factions, not a monarchy with a single Will running it. Some of these factions in your wife's brain love you. Some of these factions crave the high she gets from the romantic attachment with her coworker. That high is like a drug, and just like a drug addict with the best of intentions, you can't trust her, because she can't trust herself right now. Addicts will lie and scheme and yet hate themselves for doing so. The question is, which internal faction within her will win in the long run?
To be honest, even happily married people get crushes on thier coworkers, because it is a place where males and females mix on a regular basis. Of course, having a crush is one thing, acting on it is another. Eventually the feelings pass...you must get your wife to see that it's not worth risking what you've built together, for feelings that will not be there in a year or two.
But keep your eyes and ears open! You might need to verify everything she says until trust is rebuilt. My ex-wife cheated on me, but she was very dishonest about it. She said she was leaving...and it was only when I did some digging, that I found the first piece of evidence. Of course, she denied it and after a little more digging, I finally got at the full truth. Just weeks after she divorced me, she told me her feelings had changed.
