I agree it is best to say as lithtle as possible.
You are understandably very shocked by what has happened and will naturally fnind it hard to act as usual around SIL. The children will pick up on it so it might be as well to think of some excuse that does not worry them or put him in their bad books, perhaps just pretending you're not feeling well or something.
It may shock you to hear this, but I don't think that being physically unfaithful is the worst thing a man can do. I am not saying it is right or making excuses, in our culture it is not acceptable and that is that, but through history and in other countries having a mistress or more than one wife, is the norm. What most women want is companionship and to know they are loved. Men can love more than one woman.. If your SIL was a good husband and father, which I gather he was, I would put that far above him being a faithful but uncaring or violent man, or an alcoholic etc. It might help you to act normally with him if you make a list of all the good qualities and things about him that you liked, and weigh them against the fact that, like many, many other men, he could not say no to some exta marital sex which perhaps was offered on a plate or at a weak moment in his life. . If he is truly sorry and wants to make another go of the marriage, and your daughter is prepared to try as well, it will help so much if you can be feel some forgiveness in your heart and be encouraging. Whatever she decides it will be very hard for her. I truly admire the fact that she has agreed to go to Relate, and hope that she will eventually come through it all, wiser and happier. Again, I repeat, I do not condone it, and a lot depends on the extent to which he led the other woman along, as to whether he is worth hanging on to, but that can only be your daughter's decision. .
Even if they split up, he will have access to the children and still be in your lives,so that, tempting though it may be not to, it is worth remaining civil.