Depends if both can operate out of respect for the situation, and in that case, it just turns into a 'roomate' type situation. Both parties have to be able to live like this though. I don't think I could though, but there are all types of people in the world that make the world go round, so it would't surprise me to find that there are people doing this today and making it work.
I agree but this also applies to women too. The kids are not stupid and can tune into the hostility. People can unconditionally love their kids, while not with the mother/father.