If you dig a little deeper you're probably going to find that this has been going on for longer than you know.  You just recently got wise to it.  You wife has absolutely no respect for you.  If she's going to Craigslist that means she'll hook up with anybody she can contact.  And imagine what she's coming into contact with.

First thing you need to do is separate so you can get yourself in order.  You also need to get yourself a full STD screening.  Then you need to decide whether or not you really want to stay with her.  You say she wants to work things out; ask her why.  The time to work everything out is before screwing around.  No doubt you have some issues going in your marriage that have put a strain on it, but she has created an even bigger problem that has shattered it.  She would have to be truly remorseful about what she's done and be willing to jump through hoops to make things right.  I doubt you will find that in someone who hooks up with random Craigslist contacts.   

I think this is more common than most people give it credit. You two started dating at a very young age, so it is probably safe to assume you were her first and only sexual partner for a long time. When couples who started dating young get older, they start to feel like they want to experience new things, try things they've never done before, especially sexually. Women probably do this more than men, they hit 30 and realize that their biological clock is ticking down, that this is their last real chance to experiment. I suggest talking to her, maybe going to marriage counseling, and be open to new things. If you are okay with it, consider an open marriage, so you can both experiment with different people, you can set rules for this so no one gets hurt. Try new things in bed, have a family member or babysitter watch oyur kids, go on a romantic getaway weekend and have very rough sex. Wake her up in the morning with a hard fucking, try lots of foreplay, maybe take some viagra if you have issues with lasting a long time. She wants something different because she never got to have a wild time when she was in her teenage years, so if you want to stay with her then you will probably have to help her get over this mid life crisis she is going through.

Anyone willing to be in a open marrige doesn't no the definition of marriage