my story - gone, back, gone, back again? help

[Dayana]

I have a long story ... 3 years worth. H started affair after 12 yrs marriage (Jan 2007). After I discovered it, another 6 months of agony, him not wanting to leave but not wanting to give up OW either. Meanwhile he borrowed $100K from her. Less incentive to give her up - she wanted money back. The OW and money won.
Lots of phases since then of wanting to come back but H never prepared to face up to the real issues between us (poor communication, no responsibility from him, lots of anger from me).
Wanted him back, but with changes - he said he didn't want to change. Said I had too many conditions. He moved in with OW.

Cut a long story short, he moved out of her place a couple of months ago (Mar 2010) - has been saying ever since that he wants to come home. Actually he is begging me. Actually I feel like he is blackmailing me. He won't ask me out, hang out with me, help me with kids, unless I let him come back. He says not living with us is too painful and that he will do everything I want if I let him come back and give him a chance.
Problem is, he took all my trust and yes, my money too - only reason I saved the house is that my mum bailed me out.

I feel that I need to see some changes before I can consider living together again. He says he can't make changes without me demonstrating that I want him by letting him back home.

I make him welcome all the time, I give him dinner, I tell him everything that is going on with kids, invite him to family occasions, get kids to phone him and tell him stuff. I feel that I am doing all I can. I just cannot at this point have him come home - i am too afraid of the consequences -will he hurt me and kids again? will he be financially destructive again?

Today he told me that if I won't have him back home then that's it - the show is over. I suspect he is thinking of returning to OW, if she will have him.

I believe that he does really want to make a go of it - he is so depressed and misses kids, but I really really question whether he has the actual capacity to make the changes required. But this may be my last chance - give him a go or give it up (if he means it as he has said this so many times before).

I am exhausted and feel like after 3 years of this roundabout I am going crazy.

Advice????