I agree with your telling your husband...not sure about the in-laws...I think it would have sufficed it to say that there was a major falling out and you don't wish to have contact with him or hear about him at all....
On the other hand...I DON'T agree with cutting family off over thier interactions with this man...granted he is wrong to have done this...but he did tell his wife as you did tell your husband...yet, he isn't telling them that they shouldn't associate with you...yes, I know he told lies...but really an A is all based up on lies...yes he hurt you but perhaps somewhere in him he feels some hurt too...it would be hard to judge...and is this something he has done before...is he a cronic cheater??? Or were you his first...because that would play in to this too...if it was his first...then he made the same mistake you did...maybe for different reasons...but still a mistake (although being on the receiving end of a spouse having an A I think that "mistake" is putting it mildly)
I do think that you and your H can put this behind you....I also think that in time you can get over this man completely....if your in-laws are willing to not mention his name that should be enough....if he calls...well that is for you to deal with....if they are with him when you call...again, deal with it...I don't think this is something to break the family up over...this man and your BIL sound like life long friends....and it isn't right to give them that ultimatum because of your misrelationship (is that a word?) with this man....your SIL is correct in that he hasn't done anything to them...just as you didn't...so where is the difference???
I am not meaning to sound cold about this...I wouldn't personally feel comfortable with someone who cheated on their wife...but then I might not feel comfortable with someone who cheated on their husband either....I hope you can understand the other side of this and don't pull the card of cutting off the family....
Take your time...keep your distance as needed...but you only have one family!!!...somewhere down the road you H might resent you for "causing" him to loose his brother....see?...this could become a much bigger issue then it needs to be...