(((millicent))) I know what you are going through has to be rough. When my first H cheated on me, it was with a woman I knew...though we weren't really friends...and are far from it now. I can actually relate to your situation more from your kids point of view because when I was a teenager, my mother cheated on my father with his friend and business partner. It was awful. I blamed my mother and the OM. It took some time but now my mother and I now have a wonderful relationship even though she and I barely spoke for 2 years after she and my father divorced (more my mother's choice). My mother has been married to the OM for nearly 30 years but many times she told me that she was sorry for what she did and that she still loves my father. I still don't like my mother's husband all that much but I have tolerated him for my mother's sake.
I don't know how your D's and your H will handle the situation. I doubt it will be easy and it may take some time but if your D's are anything like you, they will be fine. You have shown your D's how to be strong and live up to what ever challenges life has to offer.
When you talked to your H, did you tell him how you felt?...Silly me...I am sure it would be like talking to a wall. I doubt talking to this woman would do much good either but you might want to give it a try. Would that help you process any of this? Could you set any boundaries with her when it comes to your D's?
I wish I had something more to help you, but I think the hurt you are feeling is completely understandable and normal...and there isn't much you can do to fix that except give yourself time to process and heal.