A little background on me, so you know where my answer is coming from: I am a recent nursing school graduate and have been working since graduation on an OB floor. I also recently became a La Leche League leader.
A good friend of mine nursed her youngest child during her fourth pregnancy with no ill effects to either the child or the fetus. It is possible to nurse a child while pregnant. Your milk supply might dwindle a little bit, and it might taste different because of the hormones, but if your daughter is satisfied, you can continue to nurse her. Studies of women who became pregnant during nursing and who continued to nurse have shown that more than half of the older nurslings weaned before the end of the pregnancy. Some women also experience nipple soreness due to the increase in hormones during pregnancy, which can lead to weaning as well.
The reason you will be discouraged from nursing during pregnancy is because nursing stimulates the release of oxytocin from your brain. Oxytocin is a hormone that increases milk supply, stimulates loving feelings (it's often called a 'feel-good' hormone, alone with prolactin), and it also can cause uterine contractons. It has nothing to do with breastfeeding being "arousing," as one mom suggested. Having sex also causes the release of oxytocin, and no one suggests that women stop having sex during pregnancy unless a woman experiences signs and symptoms of pre-term labor.
If you have a history of premature babies or pre-term labor, you might want to reconsider nursing during pregnancy. If you are healthy and have an uncomplicated pregnancy, however, you should not have a problem. You should certainly make sure you are eating a well balanced diet and gaining the appropriate amount of weight. You might also consider taking additional supplements to be sure that all three of you are receiving adequate nutrition.
I would second the recommendation to contact your local La Leche League for more information and support, or contact a lactation consultant.