My situation was a little difference because this woman was in my daughter's life before she was even a year old. And when they moved in together and subsequently got married, I realized my daughter was going to have this woman in her life no matter how much I detested what she did.
I viewed her as a moral less whore. I still struggle with humanizing her. besides the fact I was struggling with some other woman coming into my family when me and my daughter were building our special bond. I did not want my D to go to her wedding because I felt like I was backing down on my morals, and for my D to witness the union, made me ill. She was 3 at the time.
Honestly, I don't know what I would have done if my daughter was in her teens. I've done this strictly to make sure my young daughter doesn't grow up uncomfortable.
It's ok you don't know which way to go with this right now. If your kids aren't concerned about meeting her yet, and you haven't, there is not rush.
When the "grudge" becomes too much of a burden to YOU and is weighing you down too hard, you make your decision then.
It's also something you don't have to worry about until a your kids do meet her an dis invited to an event. I imagine you will go to that event, see her there, be cordial, and go on with life. It doesn't have to be anything more than that. You don't need to bake pies, and braid each others hair. And remember, if the day does come when you meet, it's not you backing down on your morals. it's you doing whats right to keep your inner peace or doing whats best for your kids at the time. It will never have to do with her.