Further Update:

Spoke with my WAW this morning before work about the OM. I know we are not suppossed to initiate discussion around the relationship, but we did have a good talk, I think. I wanted to make it really clear to her that I did not think it was appropriate for her to be seeing the OM and still living in our house. Through the course of our discussion she did say that she has seen a huge improvement in me re being a nicer person and a better father. We talked about doing what is best for the kids and agree that we don't want a divorce. The challenge still remains that she says that she can't go back to loving me again. I told her that having the OM in the picture doesn't help the situation. She then stated that he has been encouraging her to sit down with me and talk things out and identify what further changes she wants to see in me to improve the marriage. (I find this statement hard to believe!) Anyways, will keep plugging away and try to stay away from any more relationship discussions.