Ovrrnbw, what to do next seems like a critical step. I ultimately believe your wife will choose you but until now she's had the option of you plus OM so she's been back-and-forth. It seems the approach that has the best chance of working at this point, if you still wish to save your marriage, is the strong tough approach. An approach that will demonstrate that you've had it, that this is it, and she doesn't get any more chances combined with a total change in your demeanor may propel her to get serious and decide. You don't need to tell her you know she was at OM's house but you can tell her the fact that she didn't come home last night sent the signal that she's not willing to re-build the trust that's been broken. You can say as a result one of you must move out immediately.
Your wife seems confused and out-of-control so eventually she'll probably settle down and decide what she wants but staying quiet and saying nothing, telling her it's wrong, or doing no contact without action towards ending this situation only prolongs your suffering while enabling her affair.
Ultimately it's your decision and you know the situation better than we all do, but I do sense the strong tough approach will get the best results and will empower you to take charge of the situation.
