Opinions please?

My wife had an affair. We've been married 20 years and about 8 months ago, she started dancing again. She had danced once and awhile with friends in the past and I was never really crazy about it, but we had a very strong marriage and close relationship so I didn't worry. The difference was that she started going every and after 3 or 4 times started going by herself, then twice a week. I soon discovered she had met a guy and was having an affair. I confronted her and she continued the relationship, even flaunting her relationship and threatening me if I interrupted the affair. To make things worse she ended up abandoning our children for about a 4 month period leaving the two youngest crying every night for their Mommy. This was a 180 degree change in her personality and her friends were shocked.

At the end of the 4 months he moved back to his home as he was in our area temporarily on a short assignment. They continued talking by phone and emailing for the next couple of months, but this slowly reduced to a call once every few weeks.

She has since worked very hard to repair the relationship, she quit dancing and really become the loving mother she had been before all of this. We've had our struggles while trying to heal, but things have been getting really good. Until last Sunday.

We had agreed that she would not go dancing period for the time being while we tried to rebuild our marriage. I left on a business trip Sunday afternoon, called home late that night and discovered that she had left the girls with a friend and my 13 year old son at home to go dancing. She did not return home until after 1am and was unable to get the children to school the next day because she and the children were all tired due to lack of sleep.

I was angry and we talked for 5 hours about this and our entire relationship. The bottom line is that she says she still loves me, she says we are perfect for each other ( except that she says I am a lousy dancer and that is why she never wanted me to go ) and that she doesn't want a divorce. BUT... she feels that she cannot live without dancing and if I want to take lessons and go, that is ok with her.

The worse part however is she feels that adultry or cheating is only the act of sex. She says that she is romantic and passionate and that she does not feel that way towards me and needs it. So she wants to me to not give her a bad time if she wants to kiss or make out with or hava a romantic tryst with another man. She says I have 80% of her heart, she just needs to be able to save 20% for other relationships. She wants to know why I can't be ok with that as long as she doesn't cross the line and have sex.

She basically said, if I can't live with that then I need to divorce her. She really doesn't want that, but that is her way of pushing. My response was that if she wants to act single then she needs to leave and be single.

Am I crazy to go nuts when she goes dancing?

I feel I can't trust her. Am I paranoid?

How do I respond to her ultimatum?

I love my children more than anything in the world and can't imagine not living with them. So I feel paralyzed to do anything for this reason. But I do not back down in telling her she is wrong.

Help !!!!