As I understand it, Crunchymama, it isn't just enough that his wife had to know about you. She needs to accept and approve, for it to really be polyamory. Otherwise, you're still just the mistress of a cheating husband whose wife happens to be aware of you. She doesn't approve, and hasn't accepted being in a poly relationship, obviously, since she's just saying it's okay for him to be sexual with you but not to love you.
Now, why do you think it's still okay to continue the relationship with him under this circumstance? I am curious how you rationalized it, or how he convinced you to keep doing it.
You didn't want her permission before
he cheated on her with you, and so you knowingly engaged with him in doing something quite disrespectful to another woman, his wife to whom he has a commitment. The fact that you insisted he tell her -- eventually -- was too little, too late, if you ask me. You make it seem as if something's wrong with her for being hurt and "hating" you, and for wanting to restrict your involvement with her husband. But you helped him to betray her. Own up to that, at least. And now it's his responsibility to repair that broken trust.
I think you absolutely need to
walk away and let him take care of his marriage. Your presence in his life is not helping. If they get back on level ground and both are on board with you being his second partner, well, then you have a choice to make. As long as you continue the way it is now, her disdain and disapproval of you -- and the tension between them because of you -- will make you feel like what you have with him is something cheap and tawdry. Is it worth it?
It is unfortunate that you let your children get close to him (how long have you been together?), but if you hold your head high and walk away from this, at least they will see how Mommy is able to ethically rectify a mistake she made, and can recover from a messy situation with dignity. Find a hobby, make some friends, date other guys. Leave this one alone for a while.
I wish you luck.
Please see the post I just added
to Mahogany's thread. You should've introduced yourself as the person she's trying to deal with. What I wrote above still stands as my opinion, but until we knew who you both were, it's like we're flying blind in trying to discuss your situation or offer advice!