Amanda1, God I know just how you feel, you may be aware that my dh and my ex best friend have been having an affair and like you I have to see her every day as our children are at school together.
My first piece of advice is try not to stew on it, I did and it all came out in the end with me losing it completly in floods of tears and yelling abuse at people and I felt rotten afterwards. Do you have another friend who you can confide in, who will just listen and let you just talk, cry etc. without making her own comments etc. I found this one of the most helpful things I did / am doing.
Once I had calmed down I spoke to my ex bf and asked her for a drink to 'clear the air'. At the pub I simply and calmly told her that I was not interested in what she thought but wanted to her to hear how I was feeling. I then explained all the hurt and feeling of betrayal and said I doubted I could trust her again. I felt really proud of myself for this because I had taken control of the situation - I really would recommend doing anything that puts you in control as it boosts your self esteem, which I should imagine is at a pretty low ebb at the moment. Perhaps you could arrange to see her on neutral territory before you go back to work so it doesn't become a huge thing for you. Also don't be afraid to go back to your doctor and talk to him/her about it.
This was all 3 months ago and now my ex bf and I do see each other socially (other than at school)for a coffee sometimes, but it is still very strained as we have both agreed that what has happened is off the agenda. This is positive and helps me as she is no longer 'the witch' that I had built her up into. Who knows where it will go - depends on wheteher dh stays with me or does move in with her I guess. I guess what I am trying to say to you is don't force the issue with her, take it slowly and just see what evolves if anything, but above all make sure you drive the agenda, but don't expect too much, she may not want the same as you.
I would say that her denial and anger are just signs of guilt, that she knows she has betrayed and hurt you but can't / won't admit it to herself or you. Ignore it and hopefully it will go away.
I do hope that over time you can rebuild your friendship with her again if that is what you want, but do look after yourself, concentrate on doing things for you that make you feel better about yourself and don't forget that we are here if you need us.
Take care and thinking of you.