Cinders, I do believe that there are cracks in the facade of the love birds nest! I think she's not only insane but stupid to think that you would even discuss the situation w/her and you aren't even divorced yet.
If I were in your shoes, I would politely decline, but state that the children could join them if they wish. No, you do not need to be a part of that mess.
On another note, I've very happy for you! You should so much better and that may be part of the problem w/your h and his ow. You see, when we start to grow and really separate from them, they sense it and that's when things begin to bubble and boil. Cinders, step way back from his mess and just enjoy your life to the fullest. Life does come around full circle in due time.
Sit quietly, the answers will reveal themselves when you least expect them to. The past is gone, the present is a gift and you need to focus on today, allow the future to reveal itself when it is ready.