Welcome, codeflayer. You've got some great suggestions already so you'll see what a great resource this board.
May I make a suggestion about boundaries? Put your kids square and center. Don't just say it, do it. All of your other boundaries will flow from that. This situation is not about your wife, this is about providing a safe and secure environment in which they can grow.
For example: I will protect my kids from harm. If anyone threatens their safety, emotionally or physically, I will do everything in my power to ensure that threat is eliminated. You taking them to school is a great idea. How much time do they have with her after school until you get home?
You have to be their advocate and their protector, no matter how much pain it causes you or your wife.