Isn't it strange how in the end, it is the friendship we miss the most when they take themselves away? I hear you, I miss my best friend, too.
I do not have children and do not usually post advice concerning them, but the asking young children to lie to you is something I would certainly discuss with him. Not with anger, but with acceptance that if he is going to introduce your children to his OW (really, you can't stop him) do not teach the children that lying is OK by asking them to cover for him. I am sure others have gone through this so they may be able to guide you more.
Focus on what is good for you and the kids. If there are holes in his life, he needs to fix them himself.
