Hello,
This is Kitt and I am sorry your going through this. It seems like everyone wants you to pick sides and that is very difficult.
I think with your wife and children if they can talk it out and it is reasonable then if you can stay out of the middle and not let them manipulate you into thier discussion that is the best way to go. They must have their own relationship and you are not the referee.
As far as your friend, if he cannot understand your life has changed and so has his role then he is not a devoted friend. He also needs not to give unsolicited advice to you. If the two of you can get together great but you should not feel guilty for any reason. You are living your life and he is his.
Remember to be assertive and know your boundaries. :)