I recently removed the walls in my bathroom to begin a remodel.
(Actually a dude did it. But I DO take credit for installing the shower
light you'll see in the picture.)
My brother in law came in and told me I have mold on the fiberglass
insulation. The dude said that it was just water damage. Does anybody
care to weigh in? And will I have to replace this stuff?

http://www.hockspot.com/help/insulation.jpg
Thanks!
-ben

And will I have to replace this stuff?

If the wood is sound, no.

If it wasn't in perfect shape, I'd replace that pink bathtub. It's not
too big a deal to pull the moldy insulation outta there. Then a strong
bleach solution wouldn't suck, either. Might want to wear a mask, just
to pretend to be safe. Tom

it's mold. is the roof also leaking into the upper wall? see mold and
remodeling info at:
http://www.buildingscience.com/resources/homeowner.htm