#1 - You
#2 - Kids
#3 - Her
Remember that.
I know the first instinct is to put your kids before yourself, but in reality, if you are not well of health and sound of mind, those kids won't have someone to look up to. So YOU come first. Then THEM. Then... her.
But "HER" is replaceable.
YOU aren't.
Your kids aren't.
I hate to agree with most here, but you ARE negotiating your marriage.
Now, I won't harp into the divorce aspects or how to rekindle your relationship... but I will harp into the fact that you are now coming from a position of knowledge, although not power.
She obviously holds the strings to the relationship even if it seems like you might have them.
BUT you have the knowledge of HOW to deal with this... and this forum can lend a great hand. See, my problem is that you consider a minor victory over HER... the fact that you went out with the kids and went somewhere else. I know that you went out with them to have a good time with them, but it seems that you also did it in order to spite her. And please, don't say you didn't... or else you wouldn't have posted "minor victory".
I know they say that love is a battlefield, but you need to understand that in order to survive whatever comes next... you need to subtract her mentally from the equation. You seem to be coming from a position where you NEED her, where without her... YOUR life equation is incomplete, even though she seems perfectly happy with subtracting you.
Where do you go from here?
Be you. Do you. You and your kids are top priorities.
Hit the gym. Go out with them to new and exciting places. Stop going to those gigs. Whether she screws him or anyone else... hey, it'll happen whether you talk to her or not.
But you need to put your mental sanity above all... and right now, the top 2 priorities I listed at the beginning of the post, are all you need in order to conserve that peace of mind and sanity.
If divorce did happen, would you lose some money? Perhaps.
But at least you will have been ready. At least you were already working on you. At least you spent quality time with your kids.
We can't deny that your situation is grim, but you have the knowledge to deal with it, unlike many unsuspecting men who get handed the divorce papers and then BEGIN to wonder, where it all went wrong.
I think it's time for you to stop TALKING about this with her. It's time to start acting for Priority #1 and Priority #2.
And I second Jophil's notion... keep us updated.