I agree with some of the above posts that the concept of known donor and co-parenting isn't the problem, her age is. 18 is a child - and yes, some kids make a success of having kids themselves, but from what you've said she seems very immature. She would probably be much better off finding out who she is and what she wants out of life.

Teh otehr red flags are a) that she says she's in love with him, but is used by him as a way to get sexual contacts and b) that you think she's trying to keep hold of him by having the child. That sounds like a trainwreck in process, and something that might cause huge amounts of pain and damage to both herself and her child. (And he sounds like a total nightmare, frankly.)

I don't think that gay and lesbian friends having and co-parenting a child between them is in any way wrong or unworkable; it can be a very stable, loving base for children. I think you're right, though, to be very worried about this particular situation, as it seems a long way from two adults who have thoughtfully considered what they want from life making a serious decision together - it sounds like a potential mess and a half.

I think briggsy's girl has a great idea - if you can convince her to go through a clinic, it will hopefully make her undergo counselling and really think about the consequences of what she is trying to do.