C.,
I would also suggest you wait to have a new baby. Your family needs your undivided attention right now. A new baby will just make the feelings already present even worse.
First sit and talk with your husband. Discuss how you want the family to be, and ask him if the kids have talked to them about you. Ask him to talk to his ex also.
I am not sure where you live, but when I got a divorice in Texas we had to take a class about how to deal with the children and your ex. This was really helpful!
Here are the basics.
1) NEVER EVER say something bad about their mother. Try to keep things on yourself and on the situation at hand. Don't say bad things because they will hate you just for that, even if they know the things you say are true.
2) Be consistent, firm, calm and loving. It sounds sappy and they will groan, they will yell and they will pretend to hate you... Tell them you care about them. Tell them you are doing all you know how to do to make them safe and happy. They will believe you if you do it over time and are consistent.
Be clear what the rules are, write them down. Write down the punishments for each rule if its broken (do this as a family group and put the notebook somewhere everyone can reference easily). Explain WHY these rules are in place. Usually most rules are about safety and respect. Talk about respect and how to show it, make sure you respect them and expect them to respect you in return. Your husband will be the big part of this.
Consistency is the key! Every time the rules are broken, follow through immediately.
3) NEVER fight with their mother or their father in front of them.
Suggest calmly that you can discuss it in private at a time when each of you are not upset and can discuss it calmly. Do this with the kids too. Make sure that after things calm down you do let them speak their peace and then you take a turn. Come to a compromise or an understanding.
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Remember you chose this family, something that makes you unique! You chose to be a part of these kids lives after they were already who they were. Point that out and remember it yourself. It will take time but its worth it.
If things don't improve after about 6 months of the above suggestions, I would definately go to family counseling.