hi, this also happened with my brother. He had been dating, living with his girlfriend and they came over for christmas. She was about 5 months pregnant and it was a surprise to all of us - my brother had never said anything about her being pregnant. Well, come to find out, my brother knew it was not his baby, she had cheated on him and became pregnant by other man who left her. We threw her a big baby shower, bought all the baby furniture, tons of clothes, etc for the baby, thinking my brother was the father. Her family also came to the shower, they knew the baby was not my brothers, and were just delighted that my family had bought the crib, car seats, stroller, changing table, etc etc etc. We did find out that baby was not my brothers, but not till she was four years old and they broke up. We were told by girlfriend we could no longer see my niece because my brother was not father, my brother did admit he knew all along he was not the father and that her family knew he was not the father. She is 15 years old now, and she carries our last name. my brother also lied to the insurnace company that he was the father so she could have health insurance. I am glad they never found out about the fraud. My mother heard from the ex-girlfriend about three years ago. the child now wanted to change her last name, because she did not know us and did not want a different name from everyone else in her family - mom married, had other children. she needed my brothers contact info to notify by brother of th change of name in probate court.
I still love her and think about her as my brothers child. I do not regret buying all the things I did for the baby. I just think it was wrong for her family to ask us for more purchases of the babys needed things (they asked us to buy diapers, formula, wipes on a continued basis so they would not have to do all the buying) - oh, my brother, very cheap and did not supply baby with many things that he bought on his own.
congratulations on becoming an aunt - babies are a wonderful thing, it is not the babys fault, the baby does not get to pick their mom.