Okay, well I maybe way off here...but....
Kate was asking Jack what "they" had said to him. I thought maybe she was worried that they told Jack about her and Sawyer. That they had used that hurtful truth to get him to choose to stay with them.
I think Jack wanted to tell her that he had seen her and Sawyer doing the wild thing. That was a crucial turning point for Jack and caused the chain of events that followed. It was that realization that made him feel like he had to get off the island no matter what. It was the moment when he made the decision to cut the deal and leave. He did not want to return to the beach with Sawyer and Kate so he would be constantly reminded that he was once again rejected for another man.