Bryan is right. I am sorry you have been put through this. But, you need to step up and do the right thing as regards the guy's wife, as well as your wife's frined's husband. It just is not right, even immoral, to sit back and leave thise folks in the dark. As others have pointed out, surely you would have wanted someone to tell you, right?
And, here is another little tidbit re affairs: the vast, vast majority of them go undetected, forever. So, you stumbleed upon this one. What do you think the odds are that this is her first foray inot this realm? You've been together for a while and have two kids. It is highly likely, statistically, that she has done this before and your kids may be, biologically, unrelated to you.
In studies among random couples in Canada, about 10% of all husbands are raising kids that are not theirs, biolgically, unbeknownst to them. When the sampling is confined to couples where the wife has cheated, the stats go up dramatically.
You should, IMO, consider paternity testing. And, STD testing is a must.
Your information re the extent of their activities comes solelyfrom your wife. I may be mistakes
, but your wife may have just a small problem with being entirely truthful, at times.