1Co 7:14 For the unbelieving husband is sanctified by the wife, and the unbelieving wife is sanctified by the husband: else were your children unclean; but now are they holy.

This is about whether it is alright for a holy child of God to be married to an unbeliever. What Paul is saying is that it is OK. The unbeliever is sanctified (set apart) for marriage to his wife, but it doesn't mean he is right with God.

Tim, I am certain that your suggestions, though interesting, really cannot match with the rest of Scripture. "He who believes not shall be damned" (Mark 16:16). "that whosoever BELIEVES in Him should not perish" (John 3:16) and so on. We are not saved by doing good works to Christians but by repentance and faith towards God as a response to the work of God in Christ. Otherwise it is salvation by works alone, without faith.

Its better to interpret the above verses in the context of the holiness of marriage. That is what they are about.