I'm not sure about the bday gift thing. That's kinda an individual thing. I think a small gift from the kids and a non-mushy card from you would be ok.
A couple thoughts on buying the house. I think if you can afford it, it would be a shame to pass on an opportunity like that. If you DO reconcile, it can be a rental until the market picks up. I would be cautious about buying a house just down the block from where she is. It would be great for the kids, BUT if things don't work out with your marriage, could you stand to be that close? Would it hurt you to see other cars come and go from there? Would you wonder who is over if you saw a car you didn't know?
Just some thoughts...
Me 36 Husband 35 D5 S2 separated: 10/29/07-present Served divorce papers 1/22/09 "When the world gives out beneath your feet, it is time to learn how to fly."