Can you really be "in love" with someone who goes on the prowl as soon as you're not looking? Isn't that more one-sided than being "in love"? If he loved you 100%, wholly and completely, he wouldn't be prowling around for other women. Looking at X-rated sites is one thing, but looking at craigslist ads and emailing people is WAY past the realm of normal guy behavior.
I'm sure you love him, but you need to realize that whatever you choose, this is going to hang over your relationship for the rest of your life. This, in my opinion, is worse than a one night cheat from opportunity. This isn't him being somewhere and being presented with an option and making a bad choice, this is him SEEKING other women and to me, that's a huge red flag.
You've only been together 2 years, if he's already looking around what happens when you've been together 10 years and things get dull? 20 years and you're in a rut? Is he going to go prowling around every time your relationship needs a little boost?
As far as working it out for your daughter - he's only been around 2 years, you said she only just got used to him a year ago. Changes are always hard for a kid, but honestly, it'll be harder if you have a kid by him and 10 years down the line you find out he met someone else and is ready to be with them, or worse, just puts himself out there as available and ends up bringing you home some nasty STD (because seriously, WHO posts on craigslist looking for sex?)
It's just my opinion, and I know love complicates things, but honestly, I'd leave. He can't be totally head over heels in love with you if after one year he is looking for sex elsewhere, and honestly, the first couple years of a relationship are supposed to be the best - if he can't make it through the good times without looking outside of the relationship for sex, how's he going to make it through the bad times?