It might be that this woman was a good friend of your wife, but this dynamic is very different. Moving her back in with you is unwise I think. It took me and my partners 18 months to adjust enough for my boyfriend to move in. Dynamics need to play out, boundaries negotiated and tried out, time management around kids, sex, sleeping arrangements, eating together and not, private time. All of these things take time and emotional effort as well as skill to accomplish and be confident about. Its not the same as an au pair living with you to take care of the kids and her being a friend.
If I were in your situation I would help her find a place to live, a job and move her to location near you. Make a plan to get a schedule going where by you spend time with your wife, time with your kids, time with her, time with all of you and time with some of you. Once she has a steady group of friends that are her own (maybe she already does if she has been living there before), gets comfortable with the situation as does your wife, then think about the dynamic change of having her move in. That way there will be certainty that its going to work without disrupting your kids, your wife, your marriage or her life and future also. Her having a place to retreat to is going to be helpful anyway I think.
As to making a choice? It sounds like your wife is not on board with this. It sounds as if she would like to be and is working on that, but if she is going to have someone move into her home that will be her equal in every way, then that is a huge threat I would think. Not to mention the ramifications of you having cheated. I can't imagine she is that willing to just be okay with the woman that you cheated with moving into her home. They might of been friends, but the deception she is feeling is likely huge. Maybe she would be more willing to accept that you love this woman and that she is going to be sharing you if you suggested she rent somewhere for a year or so in order for all of you to get used to the situation.
I am curious about your wife. It is very uncommon for a woman to not lose her mind when her husband cheats. How has that been going for her?
Anyone want to be friends on Facebook?
Send me your name via PM