KK: It seems like she just wanted to have an initial talk with you and does not want further contact and has stopped it because she wants to avoid any potential drama/awkwardness. She may have had this in the past. Shame on her that this is her 3rd affair. You would think she would have learned not to do it after the first one! It seems like you have gone out of your way to approach her in a friendly way and not many in your situation would do that. My Lawyer told me not to involve myself in my ex's personal life. As long as you feel your kids are safe and they get along with her. She could, at least, wave back even if she doesn't want to talk. You were the better person in this case. I hope you have a visitation agreement/custody agreement in writing. If anything inappropriate comes up with regard to her and your children or your ex or custody/visitation/moving issues arise, I would urge you to contact a Family Lawyer. They are best when kids are involved. You will not have to deal with her once the kids are grown if she continues this attitude. Best wishes!
My guess is that since you refused to let your kids spend the night until you meet them she felt like you felt the people she cares about the most (your ex and her child)weren't good enough for your children. If you can tell her to her face about something anyone is that household did that you appreciated because it meant something to your child I would be willing to bet it would break the ice.