Ahh, it looks like you've reached the first real "challenge" of your relationship. The problem here seems to be more a problem with his friend, really.
He has made it absolutely clear through both his words and his actions that he loves you, wants a future with you, and that you are a huge priority to him. But remember that his kids and his own independence come first. I know working seven days a week will certainly cut down on the time he wants to spend with his kids, but at the same time it WILL help him provide for them, pay child support, and help him to get to a place where he CAN spend more time with them. I wouldn't think that this job he's considering taking will be a permanent thing - just something to keep him afloat in the meantime until he finds a better opportunity. In all honesty, it sounds as though he's thinking more as a father and a provider here than as a boyfriend. Again, I can't say I fault him for that.
As for living with Captain Sleazeball, I would agree that it wouldn't be a good idea. Does he have ANY other possible options for this? I'm not sure if distance is an issue here or not, but why would he HAVE to live with his friend for this job? Need a little more information on this. But I would encourage you NOT to think of this as him choosing his friend over you. From what I can tell, it looks like he's more trying to choose the most effective and efficient way to get back on his feet again.
Relationships are never 100% perfect - we all know this - and it feels like a slap in the face when we first realize that a new relationship isn't perfect. But remember that it's not the "perfection" that matters here so much as the strength of the relationship between you two. I guess when it comes down to it, the question is this: Are you prepared to support him in whatever decision he makes, even if you don't agree with it? Are you able to have faith in his own intentions toward you, even if it takes a bit longer than anticipated to get things in your relationship where you both want them to be?