Seeing as this item will affect generally those who in some opinion may already be damned, I don't see it as too overpowering.
It seems simply to be another means for Demons to gain access to victims to possess, and is a reasonably appropriate one.
Now, as for it being eternal, etc. It sounds like it could be undone by an exorcism so long as the gem is also available to retrieve the original soul, assuming the deity of the priest performing the exorcism is willing to the help the adulterer. (Given that the spirit which has gained liberty may be a far worse one makes this likely). I think this is a more likely scenerio then bartering with the Demon.
This is also an excellent way to bring back evil NPC's that the PC's have sent to their just desserts, though possibly in a body of a different gender :)