I'm not comfortable with the affair, either. I totally understand that he and Snow are married in the Fairytaleland. However,
in this moment,
in the present reality, he and MM believe that he is married to Katherine. David even agreed to go to counseling when his wife begged him to try and save his marriage. Although I hold MM responsible for her actions, I actually dislike David more for creating this mess. MM told him no quite firmly, and yet he still chased after her and wore her down. Shame on him.

Like you said, Poppy, if he really loved MM than he would break it off with his wife, even if it caused her pain. At least it would be honest. All this sneaking around like giddy schoolchildren just makes me feel ick watching it.
As for Katherine, IMO, she's not consciously working with the EQ. She seemed pretty darn sincere when she was begging David to stay with her.
Ok, on to the rest of the epi...
Sadly, I didn't like the rest of it, either, and normally I love this show. The whole epi just felt off. That king just gave me the creeps, what with saying he wanted everybody to be happy and then spying on his wife and punishing for her for something she had only thought about. Supposedly he loved his first wife dearly, but it does make you wonder....a person doesn't develop that kind of personality overnight. It's even more creepy since he made a big deal about neglecting his wife and then suddenly cared about her again, or at least what she did. That whole subplot with Regina and the king just screamed "abusive husband and his victim."
I must say, though, that I loved Regina in this epi. That was neat the way she made you wonder at the end. Was she really only using the Genie all along? Or did she really love him and was just using the classic "I love you but I have to cause you pain because it's better for you to go away" move? IOW, was her story supposed to roughly parallel Snow's and Charming's?
And yeah, ditto to all those who said that it just didn't feel right having Emma fall for Sydney's maneuverings so thoroughly.