I know this is very difficult to deal with and it is easy to feel guilty when your children are involved. If you and your husband are that unhappy the children will be better off if you separate. You are a loving, caring and giving mother and that will help them get through this.
I divorced my first husband after only 3 years and I knew when we got married that I was making a mistake. I only had one child with him. A few years later I met a wonderful man that I married and he has always treated my daughter as if she were his own. Not saying you have to even think of meeting someone else but for me leaving my first husband was the best thing I could have done for me and my daughter. I have never been sorry.
I don't really understand why he had to make the comments that he did when you talked to him of separating. I guess that was his way of protecting himself and not wanting to show he was hurt, but it was very insensative. It sounds to me like he doesn't want to take responsiblity for his part in your marital problems.
I will be thinking of you and praying for you. Just remember that if you are that unhappy with your husband your kids will notice that things aren't right. There are so many books and advice out there today about how to help kids through a divorce.