What should I do about this girl?

I met a girl a couple months back, and we started talking. She became part of my group of friends and we started getting to know each other, messing around, what I would consider flirting. I grew very fond of her, I guess you could say I developed a very large crush on her, to the point where I could not, and still cannot stop thinking of her. I thought that she liked me as well, I was already making plans to ask her out, to tell her what I felt for her, but around this time, I heard her mention another guy, and refer to him as cute in my presence. This really hit me like a ton of bricks, and I began to see things in a clearer light. I began to realize that I was not the only one whom she acted like this with, but rather that that was her personality: flirty. This greatly disillusioned me, and I decided to simply forget her, but this has proven to be really hard due to the fact that we are toguther much of the time. What should I do? Should I tell her how I feel and hope for the best, risking ridicule from my friends and the creation of an extremely akward enviroment in our group? Or should I just forget her, and try to stop liking her, risking regreting not telling her my feelings?