Thanks all for the advice. Many of the suggestions have flown in and out of my head all day.
Yes, my big fear is the “You are forbidden to see him!” will just have her run off to live with him in 6 months. I am currently trying to talk her father out of that mode for that very reason. She’s going to want to get away from the “horrible strict parents” when I think, left to it’s own devices, it could fizzle out on it’s own.
I am definitely not on board with getting this guy branded a sex offender or anything like that. I don’t want to ruin his life. He may be showing some poor judgment, but I don’t think he’s malicious or some kind of a predator.
For now, though, seeing him is not happening because she is punished from activities with ANY friends for the time being. I was very clear that this was because she LIED. She accepted that.
We did talk about sex, and I told her that at 17, I was more upset about her lying to me than if she was having sex. I confided in her that I was her age when I first had sex. She said she hadn’t had sex yet, and that Guy said it was not important, and he would wait until she was ready. I’m leaning toward believing her… we’ve always had a pretty open line of communication. Still, there are doubts.
We talked about going to the doctor and getting on birth control; she again said it wasn’t necessary, but she agreed to go at my suggestion, because at 17, it’s bound to happen sooner or later, so I think better safe than sorry would be the best course.
Icarus - I like all your suggestions; college has been a priority and pretty much drilled into her brain since she was a baby.
Her: “Pretty car! I want one when I grow up!”
Me: “You know how you can have one when you grow up? Go to college!” 
I will bring that point up again.
When The Guy called today, I told him I appreciated his concern, but did tell him I was NOT happy about the situation and that there was definitely more that needed to be settled with Daughter, Dad and myself before we would talk about anything else.
Cat Fight - I did ask her to look the situation from an outside point of view, not knowing the people involved. A 25 year old guy and a 17 year old girl just doesn’t sound right. I acknowledged that everyone is different and SOMETIMES it can work out, in general most people would disapprove. She said she understood my point.
HawksPath - I’m not so bothered by a big age difference if the youngest person is over 25. And not my Daughter 
Jophiel- Your personal hunch is mine as well. He does work full time and has a small place of his own. His mom has been staying with him while her house is being rebuilt. Or so I’m told.
Manda JO - I agree about not making a big deal about it. I would probably stay in a miserable relationship to spite my own mother TODAY if she told me not to. But that’s another thread entirely 
As far as the phone call, Daughter called him during a big fight with her dad. When The Guy couldn’t reach her back, he called me to see what was going on. That said, I still felt weird about talking to him. I didn’t realize why until you explained that way.
(By the way, as a lurker, I’ve seen your advice on some other topics. You seem to always give the best advice!)
SeaDragonTattoo - Thank you for sharing your story. It makes sense; you matured and he basically stayed the same. I could picture that, should this turn into something more.
And thanks to all I didn’t address specifically.
So many thoughtful replies! I teeter on the brink of “Am I totally screwing up my kids??” almost constantly. The fact that the replies have been similar to some of my thoughts has reassured me that I may not be screwing them up as bad as I thought 