Should I tell my friend that her boyfriend is cheating on her?
I think it's a duty as her friend to tell her about the situation. Well, it might be difficult for you too, or she might not believe you at first. However, I believe that real friendship won't be destroyed by such a thing.
You can give her some evidence or try to ask her questions that might give her a hint. To be honest, there are cases when girls try to deny what they already know because they're blinded by their feelings. It's crazy, I know... but it happens.
And with regards to your feelings towards the boy... you saw him cheating over your friend. Do you want to experience the same thing? Do you want to do the same thing? Well, if you and the guy would happily love each other (which I kind of doubt would), then it's okay.. I mean it's your choice and you're not directly the reason why they broke up. And it's up to your conscience on how to face your friend afterwards.
Good luck!