Should i be worried about my wife or is she naive?

Me and my wife are 28 years old and have been married five year now and have three children. my wife started a new job about 5 months ago and i had seen changes in her that i was use to. just recently i found msgs and txts from a 19 year old co worker where he flurted and called her babe? we had a hugh argument one night and she left and walked down the street so i followed her and geuss who she was txt the co worker. after that we agreed that we would cut her hours back a bit because she works at night and that she would end the friendship as she told me that they were "only friends"! so every thing went alright for a week or so then i found her sneaking out the toilet and i seen her place her phone under her pillow. so i asked her where is your phone she replied "i dont know must be around here somewhere". i ended up confronting her and sure enough she was txting him again i managed to see one txt and it said from him."ok see you later babe! im mean what the fck! does this sound like hes just a friend my mind is all messed up at the moment. the sad thing is the kids get caught up in all the arguing and it hurts me that she is hiding such things cos she :thought" that i would get angry...well duuh.... i have left about three times not lasting, i ended up going back home to try patch things up! i desided that i would trust her when she said they are friends and we are currently trying to sort it out for us and the kids. and just last night she came home from work and stayed up til 2am in the morning on the computer. i got up for work and checked the computer and found that she had been talking to him via msn so much for ending it? im going insane wat should i do???