Wow... living with his affair partner, a teenager and a mother. Sounds awesome to me <insert sarcasm here>. Hell, in that case scenario I would encourage him to do that - the shine will wear off that arrangement real quick!
I don't think you need to ignore the affair. Set boundaries, stick to the boundaries and enforce them when necessary.
As far as the talk with your little girl you keep saying WE need to have the talk with her. Your H needs to do the talking and take full accountability for HIS choices. You just need to sit there and be strong and stable for your daughter. Don't let his crappy behavior become your burden when it comes to the "talk".
IC may or may not be helpful. After a year of living apart my H finally admitted to me he was in IC because he could not live with the guilt anymore. I was thrilled. He went three times and claims he was cured. He essentially found a C that validated his bad behavior by telling him it was far more important to be happy then treat people with respect. Her solution was if you feel guilt say you are sorry and then your guilt will go away. Had I not heard this from the C with my own two ears I never would have believed it.
I really can't stand when an adult makes the declaration they are "being led down a different path". Adults don't lead, they follow and if OW/OM or inflated visions of grandeur are powerful enough to "lead them" they probably are rather lame individuals to begin with.
