Stay strong on not having her take them to school. She just wants the "easy feel good mommy" job of picking them up and taking them to school without the work of getting lunches packed, breakfast made, etc. She would get to lessen her guilt by thinking she "sees them every day". Messed up really.
Is your wife a religious person at all? "With God, all things are possible"....she should know this if she doesn't already....she needs to know this.
The Whipping Post song is sad....but i see how that mirrors your feelings right now. It WILL get better, Jeff. This is the right thing for you to do right now, and you will see your future more clearly in a few months. We are here for you during this time. You are not alone, and are in many of our thoughts.