Thank you everyone for confirming I'm not over-reacting.
The conclusion (or the way we have left the situation) is:
1. She is going to be a legal adult in 3 months, so I've agreed to let her decide what parties to go to, she has left parties when this has happened and I have to trust she will continue to do so. If I know the parents aren't home, she has agreed not to go to parties there (a little background, my kids don't go to many parties and I know almost all of their friends and their parents still-small community). Again it is about trust (not being stupid, but trusting her.)
2. The mom of the child hosting the party, is the one who told me the story originally, her response was to make the girls get dressed, she told them if they can't keep their clothes on they aren't allowed in her house. They responded that in a year they would be away at college. Her final word was, I can't control what you do there, but it isn't allowed in my house, end of story.
I just think some of it is a backlash by young girls against the "political correctness". I also have a son, and he got home from college this weekend (dad's b-day) and I asked him what he thought of this. He said without knowing the girls involved, but knowing other girls who have done this, that they do it shock or on a dare, and that in general guys think these girls are "skanky" and are generally too embarrassed to ever date them. I hope he was telling the truth, because maybe this is a "fad" that will pass because if the behavior is to get attention and dates, and it doesn't work....that might stop this "fad".
I keep thinking that there are magic words to say that will not alienate the girls and cause hang-ups and repression, but that this behavior isn't okay. They need to have respect for themselves and not strip to their underwear to get attention.
Above others have said that parental supervision is a big part of the answer and teaching your own child what to do when these kinds of situations come up. I'm just glad that both of my kids were willing to talk to me, and hopefully when in this situation will respond with dignity and respect for themselves and others.
I want kids to know that sex is wonderful and not lascivious, it isn't something done in public or for attention. When between two people who love or have a high regard for each other it is beautiful.