Gman, I wouldn't tolerate it.
By continuing to deceive you, she is eating away at trust, she is hurting herself too! It's not healthy. For you, or for her. or for the relationship.

Yes - It is not healthy for people to deceive those who are close to them, nor is it healthy for those who are deceived. IT is not healthy for the kids. And the more deceipt, and the longer it goes, the more difficult it will be to resuscitate the relationship.

How did you "confirm" it was OM?

Are you sure?

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Listen I know this hurts and it's not what you want. What I did was say, "Look, this is not a marriage I want anymore. I want you, but not if you're with him. If you want OM, that is your decision. In that case we need to sell the house, split up."

For me, it is non-negotiable.

ps: she was not crying about the phone bill. My wife did this regularly as she was conducting her affair. She'd blow up about some small household issue. the phone, or the vaccuum, or whatever. But those things weren't the reason she was upset. She was crying and upset because she was destroying the family and she knew it. but she couldn't stop.