I heard them talking about they can tell how in love she is.
While sometimes in-laws can be helpful after infidelity, that doesn't seem to be the majority of the time. What you've discovered is that they are in their daughter's corner and aren't doing what is best for the marriage. It isn't surprising, but know that this is the case. Their advice to go soft on their daughter isn't doing you any favors, so go ahead and discard it now.
she got breast implants, bought tons of clothes and shoes, super expensive spa and restaurants, cabs, international phone bills
You are trying to be nice to her in the hopes of getting her love in return. However, she is just using you for her own benefit. She has already put you in a deep financial hole and now she is using everything you've paid for to make a play for another man. Understanding the pattern that you are caught in will be vitally important for you. Please get a copy of "No More Mr. Nice Guy" by Robert Glover and/or take a look at this thread here on SI (http://www.survivinginfidelity.com/forums.asp?tid=573775)
She got on her knees and asked me to stay and apologized
She is a proven liar and manipulator. Do not believe a word that comes out of her mouth. Watch her actions and, maybe, only believe about 50% of those.
she's reluctant...she doesn't want to.
These are the actions you should be paying attention to. She is actively refusing to commit to the marriage. She is telling you that she wants to continue using you for your money, for the things you give her, to have access to the kids, to stay in the same house, but that she wants to continue having "fun" with the other man and ignoring you.
I grabbed her by the shoulders and shook her and yelled in her face yesterday when she tried to run away from me. She screamed leave me alone and I just grabbed her and squeezer her so tight.
The injustice of being used and betrayed is infuriating. We all get that. However, DO NOT physically touch her again. Wayward spouses have been known to bait their mate into a fight just to get the exact reaction that you displayed. A call to the police is made, domestic violence (DV) charges are brought up, a restraining order is served and the betrayed spouse finds themselves unable to go into their own home or see their own children. I'm guessing that your wife figures that she still has you caught in her little game, so she didn't go down that path. Once you stop accepting her excuses, she could easily resort to this type of tactic to not only get you out of the house temporarily, but to argue to take your kids away permanently. While anger is a normal reaction to being severely disrespected, you MUST find ways to channel your anger in a non-destructive manner outside of the presence of your wife and kids. If you have to, go get an IC (individual counselor) for you right now. You certainly could use one for the huge emotional trauma you've just suffered, but getting help for dealing with anger is common for men as well.
With the change in your tactics already occurring, you may want to get a VAR (voice activated recorder) to keep on you at all times. It will serve as a deterrent from you saying/doing anything that you know could be used against you, but it will also capture anything your wife says that demonstrates she is trying to manipulate the situation or that is outright false (e.g. in the case she eventually accuses you of DV).
I want to fix her
You can't. The only thing you can do is focus on yourself. Your best move is to require nothing less than being loved and respected. Anything other than that should trigger consequences (e.g. filing divorce papers) that demonstrate you will follow through on what you say. ANY waivering or continued attempts to "nice" her back into the marriage just trains her that she can do what she wants. While whether your marriage survives depends mainly on her choices right now, being resolute in what you require is your only real shot at having her wake up from the deluded state she is in.
Not sure how I'm going to pay for a lawyer.
Go get a free consultation to educate yourself on what your rights are, the likely outcomes and what the cost would be. See a second or third lawyer if you like -- you can cross-check the information you've received and it is my understanding that any that you talk to cannot take her case (conflict of interest).
Make certain to ask about the debt that you have due to her expenses. Ask if there is a way to recover any of that through divorce (you may want to catalog anything that she has purchased which has been used primarily to benefit the other man or to be used in the affair). Ask how you should protect yourself financially given her spending habits. Ask about what finances might look like post divorce given her income and yours.
[This message edited by Crushed7 at 12:42 PM, March 1st (Tuesday)]