It is her "inner lips". It is perfectly normal. Not every one has "inner lips" that protrude, but not every woman's genitals are a carbon copy either. It will appear larger when she is turned on, as well, because of blood engorgement.
And if it hurts her, you'll know (probably with an open hand to the head or face, too

)
PS: removal of this piece of skin is the equivalent of female circumcision. Her "inner lips" are part of the covering of her clitoris. If you suggest she have it removed, don't be suprised if she DOES hit or yell at you. I would recommend that you don't. Removal is also VERY dangerous and can result in a loss of sexual pleasure.
[This message has been edited by FrostyKitten (edited 01-14-2003).]