Need advice on very complicated situation. Important to read initial paragraphs first.

OK, I will try and make this very complicated situation as simple as not to get some general thoughts and advice.  But first, what you are about to read is not for those individuals that cannot fathom or understand choices that people make in their private lives.  I will say that if you have and disagreements, disgusts, or just generally am appalled by exploring differing sexual lifestyles than a simple man-woman relationship, this may not be for you.  I am not talking about a situation of so-and-so had (a/few/multiple) affairs without the other knowing about it.  What I am referring to is consensual sexual activities between multiple couples as a deliberate choice on multiple occasions, even potential as a lifestyle.If you want to respond to me expressing your disagreements/disgust/etc regarding this or what is written below, please do not.  We all have choice in our lives.  What we do with it is our own.  I can respect the fact that you disagree and may even find in morally wrong.  Please do the same in return.  I am not trying to be rude, vile, or force my beliefs on anyone else.  I wrote this first to provide a "Parental Advisory" label.  Before I wrote this, I searched on multiple sites for advice and thoughts to little success.  That is why I am writing this.  I want advice and thoughts.  I hope you can help.Moving on now.....To start, my wife and I married young (19/20) have been married for over 12 years.  The marriage was never a perfect one (child born before being married), lots of fighting, etc.  We have 4 kids.  She has threatened divorce multiple times, multiple reasons, some you will read below.[Pointing out my own faults here:  anger and temper.  I never hit my wife, although I was violent around her.  Broken windows, holes in walls.  I was diagnosed in April 07 with ADD which has a symptom of dramatic mood swings and violent temper.  Been on meds since and it is better.  Not gone.  Also, she feels I cannot connect with her in that "always thinking about her" sense.    We are just different in that area.  I tried, it did not work.  Until very recently (last 2 weeks) I wanted to continue, if she would allow me.]OK, now it becomes a mess.  During our better times, we were very sexually out there with friends of ours.  Not that things happened regularly, but enough to say it was not a random occurrence.  Each occurrence was consensual for all involved.  My wife and I always were together in these situations.  Over the past year, (as I thought things were good.  I later found out she was done with the marriage in early 2007), we actively were meeting other couples for the purpose of sexual encounter with multiple partners.  Although most of the activities were between us together and other couples together, there were a few different times of just her and a guy and one time with just me and another woman.  All of these situations (together and apart), the husbands and wives on all sides were fully aware and consensual before anything occurred.Near the end of 2007, she started to get non-sexually involved with a man behind his wife's back.  However, I knew what she was thinking (as she had cheated on me in the past.  She ended it, told me and we moved on).  I told her not to get involved with him as he has cheated on his wife with 3 different women and our sexual lifestyle choices involved married couples making the same decisions as we and this was not the case for him.  In late December, I found out (by checking her computer) that she had a few oral sexual encounters with him and at least 1 encounter involving intercourse as she left our bed in the middle of the night and did it with him in the car.  I confronted her with it and she admitted to it.  She felt this was another choice in the lifestyle that we have been apart of.  I disagreed because I told her not to get involved and that his wife was not involved either.In early February, she has kicked me out of the house after several weeks of telling me to move out.  Officially, the only thing that has happened is the fact that I no longer live at the house (signed document).  Beyond that, nothing has been signed, but we are working on separation papers.Since kicking me out, she has moved to another house (across the street from this other guy's "official" residence) where not only he is paying the bills and rent (unofficially as his finalized divorce prohibits it for 1 year.  His ex got wind of the affair) but their relationship is very out in the open (appropriate for G-rated movies).  Remember, no final documents have been finalized or signed.  Technically, we are still married.Here is my main predicament.  Currently she has full custody of our 4 kids as I rent a 10x10 room until the divorce is finalized.  This is the only thing I can afford since I am the primary wage earner and paying for the mortgage and bills on a house (the one she kicked me out of) that is now nearly vacant except for some furniture and clothes.  Things have been fairly amicable between us in the custody/visitation area.However, I am becoming more and more concerned how the open relationship of theirs is looking and affecting my children (12, 10, 7, 5).  I hear it in their voices and in their eyes.  They do not say his name around me and clam up when they do.  They know he is there ALL the time.  They call his mom "grandma".  In my head this seems completely wrong, even if she has no interest in getting back with me and has a new life/friend/perspective/etc.  In my head, this is setting a very poor example for my kids.I expressed my concerns over the past weekend and she basically said that it is what it is and she will not give that up.  I asked if we went to a 3rd party (like a family oriented psychologist type person) and that independent person said for the good of the kids to tone the relationship to an "after bed/behind close doors" type of relationship, would she do that then?  The short answer was she was willing to go to that  3rd party person, but if this was one of the stipulations, she would most likely not do it.Now what advice thoughts I am looking for (but not limited to):Do I start to make this a non-amicable separation & divorce based on that ongoing "affair"?  Do the sexual-based choices we made in the past affect the potential outcome?  Does my temper affect things in a judges eyes, so that it may be better to get everything done with and shut my mouth on it?Is the perspective I think I have that my kids are being grossly negatively affected skewed by the fact that I am the one that feels like I am not the one to blame on the end of this marriage and that I was actually "cheated on" regardless of the above mentioned choices.Any suggestions on how else to go at this amicably?Anything I should consider that supports or does not support my perspective on this?Lastly, I would like to thank all that have read this. Regardless of what you may feel towards me our about me, I would hope that any comments are words of advice and positive thought.  These thoughts, I greatly appreciate.  Again, if this is not the case, I apologize that what I have written has offended you.  That was not what I intended and felt the initial disclaimer provided an "out" without you being offended.