I'm in a relationship with a married man, my supervisor, friends of the family... help!?

Yes, it's cliche' I know and I know how it sounds. I am single. He isn't. I'm a very strict Catholic girl, he's also a very Christian-oriented man - moral, ethical, spiritual, etc. We talk all time, and yes, we've done everything but. We've tried to call it off several times. I've even thought about quitting my job and leaving the area but that's impossible due to my kids needing to reside near their Dad. Our families do activities together. My girls are friends with his girls. He's practically their second father and they love him to death. How could we find ourselves in this position if we're such "good, moral people" you ask? I don't know. He want's to leave but feels his first duty is to his children and as cliche' as it sounds, his wife is not fit to raise them. As someone who has been around them for 10 years, as a friend and co-worker I have to agree. His first choise was to honor his commitment and make it work, they tried counselling, psychologists, romantic get aways, etc. Nothing helped. He's left twice but missed the girls terribly and was miserable. Even worse, his wife has some personality issues (yes, I know every "other woman" must say that, but she truly does). She's latched on to me as her go--to close-buddy, bff, confidante. She calls daily, cries on my shoulder about life, sometimes even her husband, we socialize, I feel awful - dishonest, a traitor, not to mention a sinner, and plain awful. He's my shop supervisor to boot. We realize so much about this isn't right, but it doesn't seem wrong under all the circumstances. I can't seperate myself from him. We see each other everyday and often evenings and weekends with our families, church activities, girls scouts.... anyone ... any ideas? What do I do?? What options do we have? Any advice? Please..