FeLV, or Feline Leukemia Virus, is a disease of cats that is related genetically to the human AIDS virus (experts do not believe that FeLV poses a health risk to humans). It can spread from cat to cat by sharing food, water or litter. Cats that groom each other or fight with each other may pass the disease as well.
You were very wise to keep Palatka separated from the cat already living in the house. The risk of the disease spreading is very real if the two cats come into contact with each other. However, if you keep them separated and practice good hygiene, the risk is low.
I also commend your vet for wanting to re-test Palatka in a few weeks. The test for FeLV sometimes yields false positives (in other words, the test comes back positive even though the cat isn’t truly infected). As well, some cats are able to fight off and clear the disease.
Unfortunately, other cats are not able to fight off the disease. These cats develop fatal immune system problems and cancers.
Keep the two cats separated until the follow-up test. If the next test is negative, the risk to your original cat is low. Nonetheless, you may want to consider vaccinating her against FeLV (be sure to discuss vaccine-associated tumors with your vet before you take that step) as a safety precaution.
If the next test is positive, I see no reason to put Palatka to sleep. Finding her a new, single-cat, indoors-only home is a better option in my opinion.