I guess the now what is dependent on what you want and what you think is best for your kids. If you decide it is all over then I would say that there are two things big in your favor. First is that your kids are still pretty young, especially a 1 yo. The second is that H has moved out of town. I think most of us here would agree that our lives would be much better if our spouses would just kind of go away if they are not working to reconcile and make things better. The strain is in the constant daily battles with few if any bright spots on the horizon. Quite honestly, even though in a perfect world, my W would get her head out of her @#%, and work to make herself and us better, I have often thought about how much easier it would be if she would just go away somehow and leave our kids and I alone. Sometimes I frighten myself by thinking how much better off I would be as a widower rather than fighting this battle.
Soooo, I don't know how interested your H is in being with his kids, but him being away definitely helps.
In the meantime you should be honestly assessing yourself to see how the role you played fit into your relationship, so you can work to not repeat the same mistakes in the future.
Stand up for what is right, even if you are standing alone.