I think I need to stop exploding. Like I said I just end up looking bad... But I need to find a way to deal with it and do something each time to deal with. Hoping she'll get message eventually.
Don't think it; know it. In truth, this is the most important thing you've said. If you'll explode on her, you'll explode on other people. Not the image you want to project to others: a man who lacks self-control.
Pull yourself together: Force yourself to stop and think every time before speaking; consider what you plan to say, and evaluate whether it makes the situation any better and will it improve your marriage, on both short-time and long-term basis.
Establish a personal timeout with your wife; let her know that if arguments don't see resolution in a reasonable amount of time (30 min. to 1 hr.), you're taking off. Go for a walk, grab a beer at the local bar, whatever. Don't stay put and let a verbally abusive spouse lash out at you. Be firm and polite in every argument, and let her know there are limits and you'll want stand for her violating them. Respect yourself by being consistent.
Never ever retaliate in the argument; I know from experience it feels good. Just like your wife knows the intimate details on your weaknesses and trigger points, you know hers as well, at it's ever so tempting to launch the perfect comeback at the perfect time. Don't do it. This achieves nothing good, and only worsens things in the end.
If you must argue with the wife, don't do it in front of the kids. You should confront your wife on her worst behaviors (calling out every nasty remark might lead to claims that "she can't even talk to you", so weigh this carefully). But amid these discussions, assume some culpability. Successful marriages are one part humility, so humble yourself initially, and admit that your reactions were out of line; as you gain control, you won't have to address your past behavior. And as a follow-on point, address how she is speaking to you and how it makes you feel. See if that gets anywhere. If it doesn't, schedule marriage counseling right away. Sounds like both of you need help.
From my personal experience, I had this problem, and for a long time I told my wife that we desperately needed to see a counselor to improve our conflict resolution. She never went. As an alternative to getting help as a couple, I sought out counseling for myself and it actually helped. I independently saw a therapist and she me good ideas for managing conflict better in my home. I've gone for months without having a negative reaction with my wife.
My story doesn't end happily ever after just yet, and I believe this is good for you to know. If a couple is verbally abusive with each other, it takes both people recognizing the problem and working on it for a sustainable solution. My wife has yet to work on her problem, and like your wife, she justifies her behavior, Her verbal abuse continues.
Just a few days ago, she was screaming at me, said she hated me, cussed me out, the whole nine yards. "Ouch", said the guy who thought she loved him. I didn't retaliate, which was good, but by holding my tongue, I'm coping with a situation that isn't good for any person to endure. Point being, if you get your anger in check, your wife will likely take aim at you with harsh words and you'll have to listen for a while, before removing yourself from the situation. In the end, the bad situation is still there if the wife doesn't work on her part of the problem, and it's still damaging. Getting her to counseling, having her recognize her problem, and establishing better communication is the next challenge, after you get your anger under control.
My final piece of advice is this: you, and you alone, are responsible for everything you do and say, even when you're instigated. You will be a better man by telling yourself that "exploding" is not an option. Just like physical violence is never ever an option in any situation where your life isn't threatened, the screaming and yelling isn't either.