I screwed up...I said it looks like you have a little makeup on your shirt.

I don't think that's a screw up. I think it's an honest statement of fact.

He asked me if I was accusing him of something

Most probably because he felt guilty, knowing where the makeup came from.

and I said no that it must have been my makeup

Is it a good idea to point the blame to yourself? Would it have been better just to leave it at "No"? Just some thoughts.

I just don't understand how the OW could be the OW. Doesn't she have any respect in herself to not date a married man.

She has reasons that justify doing so for her. Whether unconsciously she's got guilt about it, we wouldn't know. It depends on how she's looking at this. It doesn't matter, it's not entirely her fault. If it wasn't her, it could be somebody else.

he gave me a hug and kiss... has told me a few times in the past night that he loves me... inside I hate sharing my H with the OW...I am soooooo hurt...I hate to think that she wont have her daddy around...

Yes, it is painful. But the pain is from what has happened, and any pain going forward is misery you're giving yourself by reliving painful associations. Thinking thoughts such as "I hate sharing my H with the OW" and "I hate to think that she wont have her daddy around" while true and reflective of your situation, are painful thoughts and from painful thoughts spring miserable feelings. The best thing to do is not to dwell on the repercussions of the A. Focus on the positives.

You were doing great and were on the right path. To keep doing this will require more patience from you then you've probably ever had to serve up before. You will also need to become more and more detached, and you can help that along by pursuing outside interests and filling your life with that. Detach + PMA + GAL = a more tranquil mind and possibly make H pursue you.

Your H sounds confused and may be on a fence. Patience and consistency on your part is needed. We're all in this same slow, slow boat, we can't make it go any faster. Well, we can perhaps a bit by moving forward ourselves, but I don't see anything that approaches a "fast forward" type of result. Some people have been at this for two years or longer, and then get results. It takes longer than you want it to, so don't give up 5 minutes before you would've gotten results, just because of impatience.

when do I really know that it is time to move on

I hear tell that it's when you no longer care and haven't cared for some time. You'll know.