Coach,
Your situation is like looking in a mirror. Though by the time my XWW was screwing around with the neighbor we had already had issues several years prior so the ability to trust was already pretty broken. Despite that I wanted to trust, to keep the family together, so I did, only to have it completely blown apart.
About 7 years after the neighbor incident I was in my 18th year of marriage when the final affair that broke the camel's back took place, this time with someone at her new job. Also only later did I learn that was she not only doing my son's best friends dad(the neighbor) but had already been the cause of a marital breakup of my other neighbor and had been seen cavorting with yet another neighbor. I was played the fool and everyone knew but me. I can't prove it but my XWW likely had a turn with damn near every guy in the neighborhood.
Suffice it to say it didn't stop her from lying, telling half truths, using semantics as loopholes in anything that was discussed etc. After a while it was pretty easy to tell when she was lying; her lips were moving.
I can't offer much other than to agree with everything that's already been said and to add that she's already admitted to disrespecting you, disrespecting your children, disrespecting your marriage, disrespecting your family. IMO someone who does that has already resolved themselves to being willing to risk it all and has lost any semblance of empathy for those around them that they stand to devastate as a result of their actions.
Once caught, they will lie(You know her capability here), cheat(she is), manipulate(which you said she's very good at) to maintain what they have. The only one who will suffer will be you and your children. And the odds are strongly against you that it will happen again. In my situation unfortunately I bore the brunt of it, protecting my XWW from everyone and everything. She took full advantage of my loyalty and commitment and stomped it into tiny pieces. All the while I got the insincere apologies, the fake blubbering, accusations of being paranoid(There were oscar level performances(crying, cursing me out) accusing me of being paranoid at her still contacting OM(She was texting OM while were on a holiday getaway together and flipped out when I called her on it) only later did I find out I was right the whole time. I ended up apologizing at the time for 'overreacting'. What a schmuck I was. Never did I ever feel true remorse from her.
I haven't read all the responses in this thread word for word but if it hasn't been said yet: Trust your gut, it is almost never wrong and doesn't lie to you. I ignored mine, stayed 10 years too long, and paid a very dear price, on many fronts, for it.
Good luck and keep us posted.
[This message edited by PNWDad at 2:37 PM, July 23rd (Wednesday)]
BS:Me 45
WS:Her 43
DD 20
DS 17
Married June 29th, 1991
DDay's: 03/20/2001, 07/25/2007, 03/16/2009 False R through all of them.
I stayed anyway.
Sent her packing June 1st, 2010.
Divorce Final 12/21/2011. Best day of my life.