Affair, Honesty, Loss

My wife as had an affair, which she said that she ended, and wants to try to make our marriage succeed. The affair hasn't ended. She continues to contact the guy, who she works with, seeing him whenever she can. She continues to lie. She says that the affair was all my fault, that she felt unloved, etc, etc. The main reason is that my ex-wife continues to invade our lives. Following "experts" advise I tried over the years many diverse approaches, none worked over time. The ex-wife does things that are right at the edge of criminal, (harassment) but never actually crosses the line. Added up if you tell someone, they'd say "Oh my God", but separately they appear as minor annoyances at the worst and nothing that could be prosecuted.(I checked). Now my wife uses this daily as the reason both for her affair and for her now wanting a separation. I feel that she told the "other" man that she was ending it with me and is now in a quandary about what to do. When she talks to someone they agree with her, but I've heard her and was present, both with a friend and in counseling, and she lies, exaggerates and takes things completely out of context. It's like she's lying to herself, and starting to believe it. We have 2 young children and 2 that visit, from my ex-wife, every other weekend. She's even started criticizing the step-children as a reason for wanting out. She has remained intimate with me and there are times when it seems our marriage is rock solid. But then it seems like a drug addiction, this other guy pops up and its back to square one. I love her dearly. She says she loves me.What do I to stop this crazy out of control ride I am on?