C.D.
If only every step mom was tried to be as understanding...the world would be a better place. But being nice doesn't mean that you don't have to set boundaries. It's perfectly normal as well as to be expected that your step son should initially reject this. His parents only recently split up, and now he is being asked to accept yet another major change. He hasn't been able to make any of these decisions for himself, they just keep getting thrust upon him. It's very scary and very frustrating. For the sake of everyone involved, I would seriously consider taking this thing slowly. Remember, you're not just moving in together, you are joining two pre existing families under one roof. If you feel confident in this relationship, then you won't have lost a single thing by taking it slow.
In the meantime, you might want to consider establishing those boundaries. Encourage your step son to talk about his feelings, but as a couple, you should not allow him to do so in a damaging and hurtful way, especially toward the little girl. Let him know that it's okay to be upset and encourage him to talk about it, but he needs to understand that feeling hurt does not give you the right to purposefully hurt other people.
If your sweetie is only recently out of this previous relationship, and the two of you had been aquainted prior to that, is there a chance that the boy's mother is blaming you for the demise of their union?
It would probably be a good idea for the father to spend plenty of quality time with his son apart from you. This helps to reinforce to the son that no matter what changes in his life, he still has a special and prominent place in his father's life. Once he feels a little more comfortable having you around, you should also spend some quality time alone with the boy. That will let him know that he can have his own special relationship with you if he chooses to. Eventually, he may realize that when he's not competeing with you for his father's attention that you're actually a pretty cool lady that he would enjoy having in his life.
Overall, it sounds like you're on the right track, but this is not going to be easy and it won't happen quickly. The easiest unions are those that are slow and progressive, so that by the time you guys move in together, it seems like the natural thing to do for ALL of you.
There are also some really good books available about step-parenting that can help you address the issues you're dealing with now, as well as others that are likely to arise in the future. Hope some of this is helpful to you. Good luck!