Agree with everyone else about the meth guy. Sorry your find yourself here but we'll listen/advise you.
I think you've got to let her go and make her understand that you won't tolerate her behavior/this guy around your kids. That is not a good example at all.
Her wanting to keep up appearances for the family is so that she can pretend like nothing is wrong/save face cause she knows she had made a poor decision.
The link that Rob posted is a great manual to follow.
